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Career progression and formal versus on-the-job training

Adda, J.; Dustmann, C.; Meghir, C.; Robin, J.-M.; (2009) Career progression and formal versus on-the-job training. (IFS Working Papers 09/06). Institute for Fiscal Studies: London, UK. Green open access

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We model the choice of individuals to follow or not apprenticeship training and their subsequent career. We use German administrative data, which records education, labour market transitions and wages to estimate a dynamic discrete choice model of training choice, employment and wage growth. The model allows for returns to experience and tenure, match specific effects, job mobility and search frictions. We show how apprenticeship training affects labour market careers and we quantify its benefits, relative to the overall costs. We then use our model to show how two welfare reforms change life-cycle decisions and human capital accumulation: One is the introduction of an Earned Income Tax Credit in Germany, and the other is a reform to Unemployment Insurance. In both reforms we find very significant impacts of the policy on training choices and on the value of realized matches, demonstrating the importance of considering such longer term implications.

Type: Working / discussion paper
Title: Career progression and formal versus on-the-job training
Open access status: An open access version is available from UCL Discovery
Publisher version: http://www.ifs.org.uk/publications/browse/type/wp
Language: English
Additional information: Revised version of 2006 paper. See http://eprints.ucl.ac.uk/2661 for related item
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/14736
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