Training, Wage Growth and Job Performance: Evidence from a Company Database

35 Pages Posted: 18 Apr 2007 Last revised: 16 Jul 2010

See all articles by Ann P. Bartel

Ann P. Bartel

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

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Date Written: March 1992

Abstract

This paper studies the relationships between on-the-job training, wages and job performance by using the personnel records of a large manufacturing firm. Utilizing a company database avoids the biases that generally result when individuals are unable to accurately recall the amount of training they received and/or when definitions of training vary across diverse firms. The main findings presented in this paper are: (1) Controlling for information on days spent in formal training programs reduces the returns to tenure by 18%; (2) First-difference models of wage growth which eliminate heterogeneity bias in wage levels show that training has a positive and significant effect on wage growth; (3) Fixed-effects models that control for heterogeneity bias in wage growth still find a positive and significant effect of training on wage growth; and (4) Training leads to an improvement in job performance, as measured by performance rating scores.

Suggested Citation

Bartel, Ann P., Training, Wage Growth and Job Performance: Evidence from a Company Database (March 1992). NBER Working Paper No. w4027, Available at SSRN: https://ssrn.com/abstract=980922

Ann P. Bartel (Contact Author)

Columbia Business School - Finance and Economics ( email )

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