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The more they spend, the more I earn? Firms' training investments and post-training wages of apprentices

Author

Listed:
  • Hans Dietrich

    (Institute for Employment Research (IAB), Nuremberg)

  • Harald Pfeifer

    (Federal Institute for Vocational Education and Training (BIBB), Bonn and Research Centre for Education and the Labour Market (ROA))

  • Felix Wenzelmann

    (Federal Institute for Vocational Education and Training (BIBB), Bonn)

Abstract

In this paper, we examine the relation between a firm's training investment and the post-training wages of apprenticeship graduates. For our analysis, we first calculate a training investment indicator using detailed information about firm-level training costs. We then merge the firm-level data with individual-level administrative data on employment and wages of apprenticeship graduates. Using regression models controlling for selection into employment, we find that a firm investment in training relates positively with graduates' post-training wages. Doubling a firm's training investment leads to a wage mark-up of about 2.8%. This result is robust to different specifications. However, we find that especially graduates from low-investment firms benefit from a higher training investment. The wage mark-up for graduates from firms with already high investment levels is small and statistically not significant.

Suggested Citation

  • Hans Dietrich & Harald Pfeifer & Felix Wenzelmann, 2016. "The more they spend, the more I earn? Firms' training investments and post-training wages of apprentices," Economics of Education Working Paper Series 0116, University of Zurich, Department of Business Administration (IBW).
    • Handle: RePEc:iso:educat:0116
    as

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    References listed on IDEAS

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    Cited by:

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    2. Pontus af Buren & Jurg Schweri, 2024. "Firms' training processes and their apprentices' education success," Economics of Education Working Paper Series 0225, University of Zurich, Department of Business Administration (IBW).
    3. Alexander Patzina & Hans Dietrich & Anton Barabasch, 2022. "Health, Personality Disorders, Work Commitment, and Training‐to‐Employment Transitions," Social Inclusion, Cogitatio Press, vol. 10(2), pages 369-382.

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    More about this item

    Keywords

    Training investment; post-training wages; apprenticeship system;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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