American Economic Review Vol. 96 No. 3 2006
Training and Lifetime Income
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.
- DOI
- 10.1257/aer.96.3.832
- Volume
- 96
- Issue
- 3
- Pages
- 832-846
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib bibtex:phds-export.bib