Comparison of Wage and Productivity Effect: A Sectoral Analysis

Abstract

Most studies on the productivity impact of training take wages as a proxy for productivity. The focus of this chapter is on comparing wage and productivity effects in order to study how the training rent is shared between employers and employees. Using panel data from 1996–2002, this chapter analyses the impact of continuing training on wages and productivity in a Cobb-Douglas production framework. Using system generalised method of moments (GMM) techniques allows to account for endogeneity and time-invariant unobserved factors. Results suggest that the training rent is shared between employer and employee because a positive effect of continuing training on both wages and productivity is calculated. High-skilled workers seem to capture a larger share of the rent than low-skilled workers.

This chapter draws on Kuckulenz (2006b).