How Long Do the Benefits of Training Last? Evidence of Long Term Effects Across Current and Previous Employers, Education Levels, Test Scores, and Occupations

This paper uses NLSY data from 1979-1993 to estimate training\u27s effect on one year wage growth. Year-by-year training histories are constructed which allow the returns to training received at both current and previous employers to vary over time. The time patterns of the returns to training are constructed for both long and short spells of training over nine and three year periods respectively. These returns are then estimated for different demographic groups in order to see how education level, test scores, and occupation influence the payoff to training. Both company training and formal schooling were associated with significant wage growth even nine years after they occurred. Company training was associated with significant wage growth effects irrespective of whether workers changed jobs, although wage growth was higher when the training occurred at a previous employer. Contrary to the conventional human capital model, employers appear to be sharing the costs and returns of general training. While training incidence was lowest for high school dropouts, their return to getting training was the highest. College graduates, in contrast, received the most training but benefited the least. These results suggest an under-supply of training opportunities for low skilled workers

Persistent inter-industry wage differences: Rent sharing and opportunity costs

We reconsider the potential for explaining inter-industry wage differences by decomposing those differences into parts due to individual and employer heterogeneity, respectively. Using longitudinally linked employer-employee data, we estimate the model for the United States and France. The part arising from individual heterogeneity can be theoretically and empirically related to the worker's opportunity wage rate. The part arising from employer heterogeneity can similarly be related to product market quasi-rents and relative bargaining power. We find that these two variables are highly correlated with both parts of the differential in France. Although the U.S. inter-industry wage differentials are strongly correlated with those in France, the decomposition is more nuanced in the American data, where the opportunity wage rate and the product market conditions are related to both the personal and employer heterogeneity

Offshoring and the State of American Manufacturing

The rapid growth of offshoring has sparked a contentious debate over its impact on the U.S. manufacturing sector, which has recorded steep employment declines yet strong output growth—a fact reconciled by the notable gains in manufacturing productivity. We maintain, however, that the dramatic acceleration of imports from developing countries has imparted a significant bias to the official statistics. In particular, the price declines associated with the shift to low-cost foreign suppliers generally are not captured in input cost and import price indexes. To assess the implications of offshoring bias for manufacturing productivity and value added, we implement the bias correction developed by Diewert and Nakamura (2009) to the input price index in a growth accounting framework, using a variety of assumptions about the magnitude of the discounts from offshoring. We find that from 1997 to 2007 average annual multifactor productivity growth in manufacturing was overstated by 0.1 to 0.2 percentage point and real value added growth by 0.2 to 0.5 percentage point. Furthermore, although the bias from offshoring represents a relatively small share of real value added growth in the computer and electronic products industry, it may have accounted for a fifth to a half of the growth in real value added in the rest of manufacturing

Using Unexpected Recalls to Examine the Long-Term Earnings Effects of Job Displacement

This paper examines the long-term earnings consequences of permanent layoffs initiated during the early 1990s, using a sample of Massachusetts workers who enrolled in Job Training Partnership Act Title III programs, and who remained strongly attached to the state's labor force. The comparison group is formed by workers who were unexpectedly recalled. On average, recalled workers incurred substantial annual earnings reductions upon reemployment. Nevertheless, one decade later, permanently displaced workers were still earning between 11 and 17 percent less per year than recalled workers with comparable pre-layoff skills and experience. Workers with limited education experienced particularly large earnings reductions from permanent job loss

The contribution of multinational corporations to U.S. productivity growth, 1977-2000

In this paper, we decompose aggregate labor productivity growth in order to gauge the relative importance of multinational corporations (MNCs) to the economic performance of the United States in the 1990s. As we define it, the MNC sector refers to the U.S. activities of multinational corporations operating in the United States. We develop productivity estimates for MNCs using (1) published and unpublished industry-level data from two surveys conducted by the Bureau of Economic Analysis and (2) productivity data for industries and major sectors from the FRB productivity system (Bartelsman and Beaulieu 2003, 2004). The resulting MNC sector accounted for about 40 percent of the gross product of all nonfinancial corporations and all of the pickup in nonfinancial corporate labor productivity in the late 1990s. Accordingly, the MNC sector accounted for more than half of the acceleration in labor productivity growth of all U.S. nonfarm private businesses.International business enterprises ; Labor productivity ; Industrial productivity