Training and Wages of Older Workers in Europe

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 recognised 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. There is no evidence of training wage premium for older workers residing in many European countries including Denmark, Sweden, Belgium, the Netherlands, and Switzerland. Very high premiums are instead found for Austria, Germany, Greece and Italy. It is, however, likely that these high premiums are overestimated due to training endogeneity and sample selection bias.

Which Is More Effective for Job Satisfaction, Expert Knowledge or Career Status Through Training? Differences between Large Enterprises and SMEs

“…First, as the pace of technological innovation accelerates, it is essential for companies to supplement the skills of their human capital (Bapna et al 2013). Second, in aging developed countries, lifetime investments in training are important in increasing or at least limiting the decline in the productivity of older workers (Belloni and Villosio 2015). Third, millennials, who are expected to account for 75 percent of the workforce in 2030, value rewarding work in a meaningful connection with their employers rather than monetary compensation (Mankins, Garton, and Schwartz 2021).…”

Older workers and employer-provided training in the Netherlands: a vignette study

“…Different theoretical mechanisms provide insights into employers’ considerations. Employers might decide to train their existing staff because up-to-date knowledge benefits the organisation and provides a competitive advantage: better trained workers are reported to be more productive (Barrett and O'Connell 2001; Bartel 1995; Belloni and Villosio 2015; Groot and Maassen van den Brink 2000; Picchio and Van Ours 2013) and investments in personnel increase the attractiveness of the organisation for new employees (De Vries, Gründemann and Van Vuuren 2001). Employers might also offer workplace training as part of a social exchange relation where workers’ commitment to the organisation and organisational support are exchanged (Cropanzano and Mitchell 2005).…”

“…In this context, training opportunities – to update and upgrade knowledge – become relevant for both workers and employers. Prior studies showed that participation in training was associated with increased employability, productivity and labour market participation of older workers (Barrett and O'Connell 2001; Bartel 1995; Belloni and Villosio 2015; Groot and Maassen van den Brink 2000; Picchio and Van Ours 2013). During their career, employer-provided training was the most important source for individuals’ training (Hansson 2008).…”

The effects and challenges of vocational training in Korea

“…Göbel and Zwick (2013) showed specific job training for old employees is not associated with higher relative productivity of these employees. The impacts of training for the elderly vary across the EU countries, as reported in Belloni and Villosio (2015). Budria and Pereira (2007) argued that larger training effects for the workers with longer experience are attributable to the outdated formal qualifications and skills that they acquired.…”