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.

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Acknowledgments

This research has been supported by the European Commission, Seventh Framework Programme, ‘Employment 2025: How will multiple transitions affect the European labour market’ (NEUJOBS, grant agreement no: 266833). The authors would like to thank the Guest Editor M. Myck, the Editor H. Litwin, two anonymous Reviewers, R. Alessie, A. Brugiavini, M. Flores, E. Fontaínha, E. Havari, K. Henkens, R. Mendes, E. Meschi, G. Pasini, A. Ruzik, I. Styczyńska, A. Tisch, and participants of the Third International Workshop on the Socio-Economics of Ageing (IWSEA), the Health, Education and Retirement over the Life Cycle (HERO13) conference and the Amsterdam Institute for Advanced Labour Studies seminar (AIAS-UvA) for their helpful comments. Michele Belloni is also affiliated with CERP-Collegio Carlo Alberto. The usual disclaimers apply.

This paper uses data from SHARE Wave 1 and 2 release 2.5.0, as of May 24th 2011 and SHARELIFE release 1, as of November 24th 2010. The SHARE data collection has been primarily funded by the European Commission through the 5th Framework Programme (project QLK6-CT-2001-00360 in the thematic programme Quality of Life), through the 6th Framework Programme (projects SHARE-I3, RII-CT-2006-062193, COMPARE, CIT5- CT-2005-028857, and SHARELIFE, CIT4-CT-2006-028812) and through the 7th Framework Programme (SHARE-PREP, N° 211909, SHARE-LEAP, N° 227822 and SHARE M4, N° 261982). Additional funding from the U.S. National Institute on Aging (U01 AG09740-13S2, P01 AG005842, P01 AG08291, P30 AG12815, R21 AG025169, Y1-AG-4553-01, IAG BSR06-11 and OGHA 04-064) and the German Ministry of Education and Research as well as from various national sources is gratefully acknowledged (see www.share-project.org for a full list of funding institutions).

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Correspondence to Claudia Villosio.

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Responsible Editor: Michal Myck (guest editor) and Howard Litwin.

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Belloni, M., Villosio, C. Training and wages of older workers in Europe. Eur J Ageing 12, 7–16 (2015). https://doi.org/10.1007/s10433-014-0327-7

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Keywords

  • Older workers
  • Training
  • Wages
  • Cognitive abilities
  • Sample selection bias
  • Attrition

JEL Classification

  • J14
  • J24
  • J31