Private Sector Training and its Impact on the Earnings of Young Workers

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While there have been numerous studies devoted to examining the impact of governmental training programs on workers who? have experienced difficulties in the labor market, there has been remarkably little research on the actual occurrence and consequences of training provided by the private sector in the U.S .. Using data from the new National Longitudinal Survey youth cohort, this paper analyzes how personal characteristics including employment histories, and local demand conditions determine the probability of receiving training and its effect on wages and wage growth of young workers. More specifically, some of the issues addressed here include the relative importance of training and tenure for wage determination and the rate of return to company provided training compared to the rate of return to training received outside the firm and schooling. The portability of company training from employer to employer and the existence of differentials in the returns to training by union status, race and sex are also investigated.

Published: American Economic Review, March 1992, pp. 299-312.

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