(Translated by https://www.hiragana.jp/)
Why Do Low-Educated Workers Invest Less in Further Training?
IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp5180.html
   My bibliography  Save this paper

Why Do Low-Educated Workers Invest Less in Further Training?

Author

Listed:
  • Fouarge, Didier

    (ROA, Maastricht University)

  • Schils, Trudie

    (Maastricht University)

  • de Grip, Andries

    (ROA, Maastricht University)

Abstract

Several studies document the fact that low-educated workers participate less often in further training than high-educated workers. The economic literature suggests that there is no significant difference in employer willingness to train low-educated workers, which leaves the question of why the low educated invest less in training unanswered. This paper investigates two possible explanations: Low-educated workers invest less in training because of 1) the lower economic returns to these investments or 2) their lower willingness to participate in training. Controlling for unobserved heterogeneity that can affect the probability of enrolling into training, we find that the economic returns to training for low-educated workers are positive and not significantly different from those for high-educated workers. However, low-educated workers are significantly less willing to participate in training. This lesser willingness to participate in training is driven by economic preferences (future orientation, preference for leisure), as well as personality traits (locus of control, exam anxiety, and openness to experience).

Suggested Citation

  • Fouarge, Didier & Schils, Trudie & de Grip, Andries, 2010. "Why Do Low-Educated Workers Invest Less in Further Training?," IZA Discussion Papers 5180, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5180
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp5180.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alison L. Booth & Marco Francesconi & Gylfi Zoega, 2003. "Unions, Work-Related Training, and Wages: Evidence for British Men," ILR Review, Cornell University, ILR School, vol. 57(1), pages 68-91, October.
    2. Almeida, Rita & Carneiro, Pedro, 2009. "The return to firm investments in human capital," Labour Economics, Elsevier, vol. 16(1), pages 97-106, January.
    3. Edwin Leuven & Hessel Oosterbeek, 2004. "Evaluating the Effect of Tax Deductions on Training," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 461-488, April.
    4. Neuman, Shoshana & Weiss, Avi, 1995. "On the effects of schooling vintage on experience-earnings profiles: Theory and evidence," European Economic Review, Elsevier, vol. 39(5), pages 943-955, May.
    5. 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.
    6. Jörn-Steffen Pischke, 2001. "Continuous training in Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(3), pages 523-548.
    7. Lex Borghans & Angela Lee Duckworth & James J. Heckman & Bas ter Weel, 2008. "The Economics and Psychology of Personality Traits," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    8. 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.
    9. James Heckman, 2011. "Policies to foster human capital," Voprosy obrazovaniya / Educational Studies Moscow, National Research University Higher School of Economics, issue 3, pages 73-137.
    10. Giorgio Brunello, 2004. "Labour Market Institutions and the Complementarity between Education and Training in Europe," Palgrave Macmillan Books, in: Daniele Checchi & Claudio Lucifora (ed.), Education, Training and Labour Market Outcomes in Europe, chapter 8, pages 188-210, Palgrave Macmillan.
    11. Margo Coleman & Thomas DeLeire, 2003. "An Economic Model of Locus of Control and the Human Capital Investment Decision," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
    12. Daniele Checchi & Claudio Lucifora (ed.), 2004. "Education, Training and Labour Market Outcomes in Europe," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-52265-7, December.
    13. Sanders Jos & Grip Andries de, 2003. "Training, Task Flexibility and Low-Skilled Workers' Employability," ROA Research Memorandum 007, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    14. Brian A. Jacob, 2002. "Where the boys aren't: Non-cognitive skills, returns to school and the gender gap in higher education," NBER Working Papers 8964, National Bureau of Economic Research, Inc.
    15. Nyhus, Ellen K. & Pons, Empar, 2005. "The effects of personality on earnings," Journal of Economic Psychology, Elsevier, vol. 26(3), pages 363-384, June.
    16. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 411-482, July.
    17. Jacob, Brian A., 2002. "Where the boys aren't: non-cognitive skills, returns to school and the gender gap in higher education," Economics of Education Review, Elsevier, vol. 21(6), pages 589-598, December.
    18. Harley Frazis & Mark A. Loewenstein, 2005. "Reexamining the Returns to Training: Functional Form, Magnitude, and Interpretation," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
    19. Giorgio Brunello & Pietro Garibaldi & Etienne Wasmer, 2007. "Education and training in Europe," SciencePo Working papers Main hal-03415950, HAL.
    20. Heckman, James J., 2007. "The Economics, Technology and Neuroscience of Human Capability Formation," IZA Discussion Papers 2875, Institute of Labor Economics (IZA).
    21. Merve Cebi, 2007. "Locus of Control and Human Capital Investment Revisited," Journal of Human Resources, University of Wisconsin Press, vol. 42(4).
    22. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    23. Barron, John M & Black, Dan A & Loewenstein, Mark A, 1989. "Job Matching and On-the-Job Training," Journal of Labor Economics, University of Chicago Press, vol. 7(1), pages 1-19, January.
    24. Santiago Budria & Pedro Telhado Pereira, 2007. "The wage effects of training in Portugal: differences across skill groups, genders, sectors and training types," Applied Economics, Taylor & Francis Journals, vol. 39(6), pages 787-807.
    25. Alison L. Booth & Mark L. Bryan, 2007. "Who Pays for General Training in Private Sector Britain?," Research in Labor Economics, in: Aspects of Worker Well-Being, pages 85-123, Emerald Group Publishing Limited.
    26. van Smoorenburg, M. S. M. & van der Velden, R. K. W., 2000. "The training of school-leavers: Complementarity or substitution?," Economics of Education Review, Elsevier, vol. 19(2), pages 207-217, April.
    27. Kuckulenz, Anja & Zwick, Thomas, 2003. "The Impact of Training on Earnings: Differences Between Participant Groups and Training Forms," ZEW Discussion Papers 03-57, ZEW - Leibniz Centre for European Economic Research.
    28. Hill, Elizabeth T., 2001. "Post-school-age training among women: training methods and labor market outcomes at older ages," Economics of Education Review, Elsevier, vol. 20(2), pages 181-191, April.
    29. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute of Labor Economics (IZA).
    30. Steedman, Hilary & McIntosh, Steven, 2001. "Measuring Low Skills in Europe: How Useful Is the ISCED Framework?," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 564-581, July.
    31. Kenn Ariga & Giorgio Brunello, 2006. "Are Education and Training Always Complements? Evidence from Thailand," ILR Review, Cornell University, ILR School, vol. 59(4), pages 613-629, July.
    32. 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.
    33. Mark R. Killingsworth, 1982. ""Learning by Doing" and "Investment in Training": A Synthesis of Two "Rival" Models of the Life Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(2), pages 263-271.
    34. Edwin Leuven & Hessel Oosterbeek, 2008. "An alternative approach to estimate the wage returns to private-sector training," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(4), pages 423-434.
    35. Daniele Checchi & Claudio Lucifora, 2004. "Education, Training and Labour Market Outcomes," Palgrave Macmillan Books, in: Daniele Checchi & Claudio Lucifora (ed.), Education, Training and Labour Market Outcomes in Europe, chapter 1, pages 3-7, Palgrave Macmillan.
    36. Gerrit Mueller & Erik Plug, 2006. "Estimating the Effect of Personality on Male and Female Earnings," ILR Review, Cornell University, ILR School, vol. 60(1), pages 3-22, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Katja Görlitz & Marcus Tamm, 2011. "Revisiting the Complementarity between Education and Training – The Role of Personality, Working Tasks and Firm Effects," Ruhr Economic Papers 0307, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    2. Görlitz, Katja & Tamm, Marcus, 2011. "Revisiting the Complementarity between Education and Training – The Role of Personality, Working Tasks and Firm Effects," Ruhr Economic Papers 307, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. repec:zbw:rwirep:0307 is not listed on IDEAS
    4. Dan A. Black & Lars Skipper & Jeffrey A. Smith & Jeffrey Andrew Smith, 2023. "Firm Training," CESifo Working Paper Series 10268, CESifo.
    5. 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.
    6. Julia Lang, 2012. "The Aims of Lifelong Learning: Age-Related Effects of Training on Wages and Job Security," SOEPpapers on Multidisciplinary Panel Data Research 478, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Yao, Yao & Liu, Gordon G. & Cui, Yujie, 2020. "Job training and organizational performance: Analyses from medical institutions in China," China Economic Review, Elsevier, vol. 60(C).
    8. Lang, Julia, 2012. "The aims of lifelong learning: Age-related effects of training on wages and job security," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62073, Verein für Socialpolitik / German Economic Association.
    9. Britta Gauly & Clemens M Lechner, 2019. "Self-perfection or self-selection? Unraveling the relationship between job-related training and adults’ literacy skills," PLOS ONE, Public Library of Science, vol. 14(5), pages 1-23, May.
    10. Jozef Konings & Stijn Vanormelingen, 2015. "The Impact of Training on Productivity and Wages: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 485-497, May.
    11. Lee, Sun Youn & Ohtake, Fumio, 2018. "Is being agreeable a key to success or failure in the labor market?," Journal of the Japanese and International Economies, Elsevier, vol. 49(C), pages 8-27.
    12. Anna Ruzik-Sierdzinska & Claudia Villosio & Michele Belloni & Maciej Lis & Monika Potoczna, 2013. "Age and productivity. Human Capital Accumulation and Depreciation," CASE Network Reports 0114, CASE-Center for Social and Economic Research.
    13. Korpi, Tomas & Tåhlin, Michael, 2018. "On-the-job training: A skill match approach to the determinants and outcomes of lifelong learning," Working Paper Series 7/2018, Stockholm University, Swedish Institute for Social Research.
    14. Bert Minne & Marc van der Steeg & Dinand Webbink, 2008. "Skill gaps in the EU: role for education and training policies," CPB Document 162, CPB Netherlands Bureau for Economic Policy Analysis.
    15. Caliendo, Marco & Cobb-Clark, Deborah A. & Obst, Cosima & Uhlendorff, Arne, 2023. "Risk preferences and training investments," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 668-686.
    16. Benedikte Bjerge & Nina Torm & Neda Trifkovic, 2016. "Gender matters: Private sector training in Vietnamese SMEs," WIDER Working Paper Series 149, World Institute for Development Economic Research (UNU-WIDER).
    17. Eva M. Berger & Luke Haywood, 2016. "Locus of Control and Mothers’ Return to Employment," Journal of Human Capital, University of Chicago Press, vol. 10(4), pages 442-481.
    18. Martin Schlotter, 2011. "Age at Preschool Entrance and Noncognitive Skills before School - An Instrumental Variable Approach," ifo Working Paper Series 112, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    19. Jens Ruhose & Stephan L. Thomsen & Insa Weilage, 2018. "The Wider Benefits of Adult Learning: Work-Related Training and Social Capital," CESifo Working Paper Series 7268, CESifo.
    20. Almeida, Rita & Carneiro, Pedro, 2009. "The return to firm investments in human capital," Labour Economics, Elsevier, vol. 16(1), pages 97-106, January.
    21. Ehlert, Martin, 2020. "No Future, No Training? Explaining Cross-national Variation in the Effect of Job Tasks On Training Participation [Keine Zukunft, keine Weiterbildung? Zur Erklärung von Länderunterschieden im Effekt," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 72(S1), pages 483-510.

    More about this item

    Keywords

    returns to training; preferences; non-cognitive skills;
    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
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp5180. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.