The Labour Market Impact of Adult Education and Training: A Cohort Analysis
| Published date | 01 May 2004 |
| Date | 01 May 2004 |
| Author | Anna Vignoles,Fernando Galindo‐Rueda,Leon Feinstein |
| DOI | http://doi.org/10.1111/j.0036-9292.2004.00306.x |
THE LABOUR MARKET IMPACT OF
ADULT EDUCATION AND TRAINING:
A COHORT ANALYSIS
Anna Vignoles
w
, Fernando Galindo-Rueda
n
and Leon Feinstein
nn
Abstract
Education boosts individuals’ productivity and wages. Yet many individuals leave
school with minimal skills and qualifications. One way for these workers to catch
up might be lifelong learning. We find that a particular form of lifelong learning,
work related training, does have a positive impact on earnings. However, firms tend
only to train those workers who will gain from training. Training does benefit those
chosen to receive it but if all workers received training, the average impact on
wages would be low. Hence, this form of lifelong learning is not necessarily an
effective way of raising wages.
I Intro ductio n
Human Capital theory (Becker, 1964) suggests that individuals and firms invest
in education and training in order to boost their earnings and productivity
respectively. The wage gain from a year of extra schooling is certainly
substantial, around 5–10% gain in earnings per year of education (Card,
1999; Harmon et al., 2000). Furthermore, in the UK, most formal qualifications,
such as A-levels or degrees, attract large wage premiums (Blundell et al., 2001;
Dearden et al., 2002). Despite this, just under half of the current cohort of young
people leave school with few or no qualifications. These individuals go on to be
disadvantaged in the labour market, in terms of their earnings and employment
prospects (Dearden et al., 2002). Furthermore, having a larger proportion of
unskilled workers than many other developed countries puts the UK at a
disadvantage economically (Prais, 1995; Steedman, 1996). One possible way
for these unskilled workers to catch up with their more educated colleagues is
to undertake lifelong learning, such as adult education (e.g. acquiring a
qualification) or training (e.g. on- or off-the-job training). Although there is no
agreed definition of what exactly constitutes lifelong learning, there has been a
w
Institute of Education
n
Centre for Economic Performance, IZA, Bonn
nn
Institute of Education
Scottish Journal of Political Economy, Vol. 51, No. 2, May 2004
rScottish Economic Society 2004, Published by Blackwell Publishing, 9600 Garsington Road, Oxford OX4 2DQ, UK
and 350 Main Street, Malden, MA 02148, USA
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