TY - JOUR

T1 - Intra-firm Wage Compression and Cost Coverage of Training

T2 - Evidence from Linked Employer-Employee Data

AU - Pfeifer, Christian

PY - 2016/3

Y1 - 2016/3

N2 - The author uses German linked employer-employee data to estimate the impact of intra-firm wage dispersion on the probability that establishments pay for further training. About half of all establishments in the estimation sample cover all direct and indirect training costs, which contradicts the standard human capital approach with perfect labor markets. The main finding of cross-section, panel, and instrumental variable probit estimations is that establishments with larger intra-firm wage compression are more likely to cover all direct and indirect training costs, which is consistent with theoretical considerations of the “new training literature” about imperfect labor markets.

AB - The author uses German linked employer-employee data to estimate the impact of intra-firm wage dispersion on the probability that establishments pay for further training. About half of all establishments in the estimation sample cover all direct and indirect training costs, which contradicts the standard human capital approach with perfect labor markets. The main finding of cross-section, panel, and instrumental variable probit estimations is that establishments with larger intra-firm wage compression are more likely to cover all direct and indirect training costs, which is consistent with theoretical considerations of the “new training literature” about imperfect labor markets.

KW - Economics, empirical/statistics

KW - firm-sponsored training

KW - linked employer-employee data

KW - wage compression

KW - Economics

UR - http://www.scopus.com/inward/record.url?scp=84961743186&partnerID=8YFLogxK

U2 - 10.1177/0019793915610307

DO - 10.1177/0019793915610307

M3 - Scientific review articles

VL - 69

SP - 435

EP - 454

JO - Industrial and Labor Relations Review

JF - Industrial and Labor Relations Review

SN - 0019-7939

IS - 2

ER -