Training, Wages, and the Human Capital Model. National Longitudinal Surveys Discussion Paper.Report as inadecuate

Training, Wages, and the Human Capital Model. National Longitudinal Surveys Discussion Paper. - Download this document for free, or read online. Document in PDF available to download.

Recent data from the National Longitudinal Survey of Youth (NLSY) were used to examine the validity of the traditional human capital model, which predicts that training lowers starting wages and increases wage growth. The primary data sample was restricted to those 4,309 members of the NLSY sample who were working for pay and not enrolled in school in 1992 and who started the job held in 1992 after the 1986 study interview. Overall, the analysis did not support the conventional version of the human capital model. The starting wage regressions did not indicate any negative relationship between starting wages and current company training; rather, starting wages and company training appeared to be positively related. Off-site company-paid training proved to be portable across employers. It was concluded that general training is paid for by firms rather than workers, which is inconsistent with the standard human capital model. The estimates from wage growth regressions were more consistent with the human capital model; specifically, company-financed training had a positive impact on wage growth independent of tenure at current job and off-the-job company training was particularly effective in enhancing wages. (Contains 22 references. Appended is data regarding the 35 study variables.) (MN)

Descriptors: Adult Education, Education Work Relationship, Educational Attainment, Job Training, Longitudinal Studies, Models, National Surveys, Postsecondary Education, Predictor Variables, Regression (Statistics), Salary Wage Differentials

Bureau of Labor Statistics, Office of Economic Research, Washington, DC 20212-0001.

Author: Veum, Jonathan R.


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