Heterogeneous Returns to Training in Personal Services

Abstract

This chapter addresses the earnings impact of continuing training in the personal services sector in Germany. On the one hand the personal services sector is among the sectors with the highest employment growth; on the other hand the share of low-paid workers is higher than in other sectors. While our knowledge of the specific situation of low-paid workers in this sector is limited (Asplund and Salverda, 2004), an obvious way of increasing both productivity and earnings is for firms to increase their investment in employee training (Hughes etal., 2004). The provision of training constitutes a major part of human capital investment (Heckman, 1999). An important proviso, however, is that training increases the earnings of this group of employees. Therefore we not only calculate the average training effect on earnings in the personal services sector, but also differentiate between the wage effects for employees with different qualifications and professional status.KeywordsInstrumental VariablePersonal ServiceHuman Capital InvestmentEarning EquationTraining ParticipationThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.