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The Impact of Training on Productivity and Wages: Evidence from British Panel Data *
Author(s) -
Dearden Lorraine,
Reed Howard,
Van Reenen John
Publication year - 2006
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/j.1468-0084.2006.00170.x
Subject(s) - productivity , panel data , statistic , estimation , economics , externality , training (meteorology) , work (physics) , point (geometry) , econometrics , value (mathematics) , percentage point , demographic economics , labour economics , statistics , macroeconomics , engineering , microeconomics , mathematics , geography , mechanical engineering , geometry , management , finance , meteorology
It is standard in the literature on training to use wages as a sufficient statistic for productivity. This paper examines the effects of work‐related training on direct measures of productivity. Using a new panel of British industries 1983–96 and a variety of estimation techniques we find that work‐related training is associated with significantly higher productivity. A 1% point increase in training is associated with an increase in value added per hour of about 0.6% and an increase in hourly wages of about 0.3%. We also show evidence using individual‐level data sets that is suggestive of training externalities.