Occupational Mobility and the Returns to Training

Occupational Mobility and the Returns to Training

By Iourii Manovski, Gueorgui Kambourov, and Miana Plesca.

Published in the Canadian Journal of Economics


The literature on the returns to training has pointed out that, immediately following a training episode, wages of participants in employer‐sponsored training increase substantially while wages of participants in government‐sponsored training hardly change. We argue that there is a potential selection issue—most of the government‐sponsored trainees are occupation switchers while most participants in employer‐sponsored training are occupation stayers. An occupational switch involves a substantial destruction of human capital, and once we account for the associated decline in wages, we find a large positive impact of both employer‐ and government‐sponsored training on workers’ human capital.

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