Training and Wages of Older Workers in Europe

21 Pages Posted: 18 Dec 2014

See all articles by Michele Belloni

Michele Belloni

University of Turin; Center for Research on Pensions and Welfare Policies (CeRP); Netspar

Claudia Villosio

LABORatorio R. Revelli, Centre for Employment Studies; R&P Ricerche e Progetti

Date Written: December 14, 2014

Abstract

The financial deficits of many social security systems caused by ageing populations and stagnating economies are forcing workers to retire later from the labour market. An extended working life combined with rapid technological progress in many sectors, is likely making older workers’ skills obtained in school obsolete. In this context, lifelong investment in training is widely recognized among the international research and policy community as a key element to increase or at least limit the decline in productivity of older workers. This paper investigates the relationship between training undertaken by European older workers and their wages, relying on the Survey of Health, Ageing and Retirement in Europe.

Undertaking training activities is associated with 6.3% higher wages. This premium is sizeable and is similar to that of attaining an upper or post-secondary degree instead of a primary or lower-secondary degree. Training wage premiums are highly heterogeneous across countries: they are highest in Austria, Germany, Greece, and Italy and are about half that in France and Spain. No premium is found for Denmark, Sweden, Belgium, the Netherlands, and Switzerland. Training premiums of the first group of countries can be overestimated due to training endogeneity and sample selection bias.

Keywords: Older workers, Training, Wages, Cognitive abilities, Sample selection bias, Attrition

JEL Classification: J14, J24, J31

Suggested Citation

Belloni, Michele and Villosio, Claudia, Training and Wages of Older Workers in Europe (December 14, 2014). University Ca' Foscari of Venice, Dept. of Economics Working Paper Series No. 27/WP/2014, Available at SSRN: https://ssrn.com/abstract=2539093 or http://dx.doi.org/10.2139/ssrn.2539093

Michele Belloni (Contact Author)

University of Turin ( email )

Lungo Dora Siena 100
Torino, 10153
Italy

Center for Research on Pensions and Welfare Policies (CeRP) ( email )

Via Real Collegio, 30
Moncalieri, Turin 10024
Italy

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Claudia Villosio

LABORatorio R. Revelli, Centre for Employment Studies ( email )

Via Real Collegio 30
10024 Moncalieri
Italy
+39 011.670.50.63 (Phone)
+ 39 011 6705061 (Fax)

R&P Ricerche e Progetti ( email )

Via Bava 8
Torino 10124
Italy
011-888100 (Phone)

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