American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Training and Lifetime Income
American Economic Review
(pp. 832–846)
Abstract
This paper challenges the notion that on-the-job training investments are quantitatively important for workers' welfare and argues that on-the-job training may not increase lifetime income by more than 1 percent. I argue that it is very difficult to reconcile the slowdown in wage growth late in a worker's career with optimizing behavior unless the technology for learning on the job is such that it generates very low gains from training. The analysis is based on a nonparametric methodology for estimating the learning technology from wage profiles; the results are arrived at by comparing the lifetime income when the worker optimally invests in his human capital to the one where he does not make any investments. (JEL: E24, J24, J31)Citation
Kuruscu, Burhanettin. 2006. "Training and Lifetime Income." American Economic Review 96 (3): 832–846. DOI: 10.1257/aer.96.3.832Additional Materials
JEL Classification
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials