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Informal Training: A Review of Existing Data and Some New Evidence

Mark A. Loewenstein and James R. Spletzer


Although economists have long been aware of the importance of a worker's on-the-job human capital investments, current knowledge about the quantity of on-the-job training and its returns is still relatively scant. This paper analyzes the formal and informal training information from four commonly used surveys, paying particular attention to the 1993 and 1994 data from the National Longitudinal Surveys of Youth. After accounting for differences across surveys with regard to their sample population and the reference period over which training is measured, the formal training responses appear quite consistent across data sets. The same cannot be said for informal training, and the variation in the incidence of informal training across surveys appears to be due to unsatisfactory routing patterns in the household survey questionnaires. Nevertheless, the 1993 and 1994 NLSY informal training data appear to be capturing quite a bit of human capital accumulation that is missed by the formal training questions. When used together, the formal and informal training measures can explain much, but not all, of an individual's within-job wage growth.