We develop a dynamic discrete choice model of training choice, employment and wage growth,
allowing for job mobility, in a world where wages depend on firm-worker matches, as well
as experience and tenure and jobs take time to locate. We estimate this model on a large
administrative panel data set which traces labour market transitions, mobility across
firms and wages from the end of statutory schooling. We use the model to evaluate the
life-cycle return to apprenticeship training and find that on average the costs outweigh
the benefits; however for those who choose to train the returns are positive. We then use
our model to consider the long-term lifecycle effects of two reforms: One is the introduction
of an Earned Income Tax Credit in Germany, and the other is a reform to Unemployment Insurance.
In both reforms we find very significant impacts of the policy on training choices
and on the value of realised matches, demonstrating the importance of considering such
longer term implications
Presented by:
Jerome Adda (Department of Economics, UCL)
Date & time:
January 14, 2008 4:00 pm - January 14, 2008 12:00 am
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