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Is Training more Frequent when Wage Compression is Higher? Evidence from 11 European Countries

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  • Giorgio Brunello

Abstract

In this empirical paper, I use the 1996 wave of the ECHP dataset to investigate the relationship between measures of wage compression and training incidence in 11 European countries. After controlling for individual factors and country specific institutional differences, I find evidence of a positive and significant relationship between wage compression and training, both firm-specific and general. While the finding for firm-specific training is consistent with both competitive and non-competitive approaches, the result for general training is only consistent with the non-competitive approach.

Suggested Citation

  • Giorgio Brunello, 2002. "Is Training more Frequent when Wage Compression is Higher? Evidence from 11 European Countries," CESifo Working Paper Series 637, CESifo.
    • Handle: RePEc:ces:ceswps:_637
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    References listed on IDEAS

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    1. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "Minimum Wages and On-the-job Training," NBER Working Papers 7184, National Bureau of Economic Research, Inc.
    2. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June.
    3. Acemoglu, Daron & Pischke, Jorn-Steffen, 1999. "Beyond Becker: Training in Imperfect Labour Markets," Economic Journal, Royal Economic Society, vol. 109(453), pages 112-142, February.
    4. Lisa M. Lynch, 1994. "Training and the Private Sector: International Comparisons," NBER Books, National Bureau of Economic Research, Inc, number lync94-1, June.
    5. Neumark, David & Wascher, William, 2001. "Minimum Wages and Training Revisited," Journal of Labor Economics, University of Chicago Press, vol. 19(3), pages 563-595, July.
    6. David Soskice, 1994. "Reconciling Markets and Institutions: The German Apprenticeship System," NBER Chapters, in: Training and the Private Sector: International Comparisons, pages 25-60, National Bureau of Economic Research, Inc.
    7. Peraita, Carlos, 2001. "Testing the Acemoglu-Pischke model in Spain," Economics Letters, Elsevier, vol. 72(1), pages 107-115, July.
    8. Daron Acemoglu & Jörn-Steffen Pischke, 2003. "Minimum Wages And On-The-Job Training," Research in Labor Economics, in: Worker Well-Being and Public Policy, pages 159-202, Emerald Group Publishing Limited.
    9. Lynch, Lisa M. (ed.), 1994. "Training and the Private Sector," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226498102, July.
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    Cited by:

    1. Bhaskar, V & Holden, Steinar, 2002. "Wage Differentiation via Subsidised General Training," Economics Discussion Papers 8851, University of Essex, Department of Economics.
    2. Almeida-Santos, Filipe & Mumford, Karen A., 2006. "Employee Training, Wage Dispersion and Equality in Britain," IZA Discussion Papers 2276, Institute of Labor Economics (IZA).
    3. Andrea Bassanini & Wooseok Ok, 2004. "How do firms' and individuals' incentives to invest in human capital vary across groups?," CEPN Working Papers halshs-00194344, HAL.
    4. Filipe Almeida‐Santos & Karen Mumford, 2005. "Employee Training And Wage Compression In Britain," Manchester School, University of Manchester, vol. 73(3), pages 321-342, June.
    5. Cörvers, F. & Heijke, J.A.M. & Kriechel, B. & Pfeifer, H., 2011. "High and steady or low and rising? : life-cycle earnings patterns in vocational and general education," ROA Research Memorandum 007, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    6. Harley Frazis & Mark A Loewenstein, 2006. "Wage Compression and the Division of Returns to Productivity Growth: Evidence from EOPP," Working Papers 398, U.S. Bureau of Labor Statistics.
    7. Ericson, Thomas, 2004. "The effects of wage compression on training: Swedish empirical evidence," Working Paper Series 2004:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    8. Conti, Gabriella, 2005. "Training, productivity and wages in Italy," Labour Economics, Elsevier, vol. 12(4), pages 557-576, August.

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