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The long-term earnings consequences of general vs. specific training of the unemployed

Year: 2015

Type: article

Abstract: Training programs for the unemployed typically involve training specific skills in demand amongst employers. In 1997, Swedish unemployed could also choose general schooling at the upper secondary level. This offers a unique opportunity to assess the theoretically ambiguous long-term relative earnings of general vs. specific training for unemployed. Analyzing detailed administrative data 1990–2010, we find 1) that specific training is associated with higher earnings in the short run, 2) that earnings converge 5–7 years post program and 3) that individuals act on their comparative advantages. When we extrapolate our estimates to life-time earnings, there is overall a relative advantage of specific training. However, for females with limited prior education, we find a relative life-time earnings advantage of general training. JEL-codes: I21, J62, J68

Source: IZA Journal of European Labor Studies

DOI: 10.1186/s40174-015-0047-9

Authors: Anders Stenberg, Olle Westerlund

Institutions: Stockholm University, IZA - Institute of Labor Economics, Linnaeus University, Umeå University

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Reduced inequalities, Quality education

Open Access status: hybrid

Funders: Vetenskapsrådet, Universitat de Barcelona, Institutet för arbetsmarknads- och utbildningspolitisk politisk utvärdering