We use the regional and time variation of training grants in Italy to identify the causal effect of (formal continuing vocational) training on earnings. We estimate log-linear earnings regressions with constant marginal returns to training and find that one additional week of training increases monthly net earnings by 1.36%, substantially less than the 3% or more often found in the literature. Estimated returns vary significantly by firm size, and range from 0.40% in firms with more than 100 employees to 2.51% in smaller firms, the bulk of the Italian private sector. A simple back of the envelope comparison of the marginal costs and benefits of training policy suggests that the latter are higher than the former.
Url or DOI
Country
Italy
Publication Year
2012
Training
Classroom/vocational training
Labour market status
Employed
Funding Source
ESF + other
Outcome Variable
Income/wages
Data Source
Survey
Evaluation Method
IV