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Training, Wages, and the Human Capital Model

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  • Jonathan R. Veum

Abstract

Using recent data from the National Longitudinal Survey of Youth, this study examines the predictions of the human capital model concerning the relationship between training, starting wages, and wage growth. As implied by the model, training, particularly employer‐financed training, is positively related to wage growth. Company‐financed training also appears to be portable across jobs or to have a general component. In addition, there is some evidence that workers pay for initial training through a reduced starting wage. The results provide partial support for the human capital model.

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  • Jonathan R. Veum, 1999. "Training, Wages, and the Human Capital Model," Southern Economic Journal, John Wiley & Sons, vol. 65(3), pages 526-538, January.
    • Handle: RePEc:wly:soecon:v:65:y:1999:i:3:p:526-538
    DOI: 10.1002/j.2325-8012.1999.tb00174.x
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    1. Daron Acemoglu & Jörn-Steffen Pischke, 1998. "Why Do Firms Train? Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 79-119.
    2. Loewenstein, Mark A & Spletzer, James R, 1998. "Dividing the Costs and Returns to General Training," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 142-171, January.
    3. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    4. Bartel, Ann P, 1995. "Training, Wage Growth, and Job Performance: Evidence from a Company Database," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 401-425, July.
    5. Brown, James N, 1989. "Why Do Wages Increase with Tenure? On-the-Job Training and Life-Cycle Wage Growth Observed within Firms," American Economic Review, American Economic Association, vol. 79(5), pages 971-991, December.
    6. John M. Barron & Dan A. Black & Mark A. Loewenstein, 1993. "Gender Differences in Training, Capital, and Wages," Journal of Human Resources, University of Wisconsin Press, vol. 28(2), pages 343-364.
    7. Jacob Mincer, 1988. "Job Training, Wage Growth, and Labor Turnover," NBER Working Papers 2690, National Bureau of Economic Research, Inc.
    8. Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
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    Cited by:

    1. Henrik Hansen & S. Kanay De & John Rand & Neda Trifković, 2023. "Wage returns to workplace training in Myanmar," Development Policy Review, Overseas Development Institute, vol. 41(2), March.
    2. Siang, Liew & Noor, Zulridah, 2015. "The Impact of Training on the Conditional Wage Distribution in Selected Service Subsectors in Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 49(1), pages 37-48.

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