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The Impact of Private Sector Training on Race and Gender Wage Differentials and the Career Patterns of Young Workers

Lisa M. Lynch


While the returns to a college degree or government training programs in the U.S. have been widely documented, there has been relatively little analysis of the returns to other forms of human capital investment that non-college-graduates undertake. This has been due primarily to the lack of appropriate data for this type of analysis. However, using the unique features associated with the National Longitudinal Survey Youth Cohort, NLSY, this study analyzes how personal characteristics including employment histories and local demand conditions determine the probability of receiving training and their effects on wages, wage growth, and employment mobility of workers. More specifically, some of the issues addressed here include the relative importance of training and tenure for wage determination and the rate of return to company provided training versus training from for-profit proprietary institutions and regular schooling. The portability of company training from employer to employer and the existence of differentials in the returns to training by union status, race and gender are also investigated. Finally, the impact of different types of training investment on the probability of leaving an employer are examined.