The provision and effects of company provided further training for the labour market integration of low skilled workers

• Applicant: Dr. Philip Wotschack
• Subject Area: Empirical Social Research
• Term: from 2015 to 2019
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 272505427

It is the aim of the planned project to investigate how inequalities in the provision and benefits of company provided further training are influenced by characteristics of the company context. By using the Linked-Employer-Employee data (LIAB) of the IAB and the Panel WeLL the project wants to analyze how differences in the company context affect participation rates in further training as well as training-related benefits in terms of income growth, employability, and upward labor market mobility. The focus is on low skilled workers, who lack a proper or adequate professional qualification. Leading is the question to what extent and under which conditions company provided training reduces existing inequalities by better integrating the group of low skilled workers in the labor market. This question is subdivided in three research questions: (1) Which characteristics of the company context increase the chance that low skilled workers achieve a professional qualification by company provided further training? (2) Which characteristics of the company context increase the chance that low skilled workers who have achieved a professional qualification by company provided further training can realize related labor market benefits in terms of income growth, employment security, and job promotion? (3) Which company settings make it more beneficial for low skilled workers to change the company (movers) in order to realize training related labor market benefits and which company settings make it more beneficial to stay in the original company (stayers)? Theoretically, inequalities in the provision and effects of company provided further training are explained by transaction cost and screening/signaling problems: Companies and employees who wish to invest in further training face serious constraints in terms of costs and uncertainty about the returns of their investment. This holds particularly true for the group of low skilled workers, since employers tend to ascribe them poor and uncertain productivity effects. Following transaction cost theory, governance structures in terms of contracts and regulations are postulated as one important solution to the problem of uncertainty in economic exchange relationships. Moreover, by building on the concept of social embeddedness, additional dimensions of the company context are taken into account, like the structural embeddeness (tense networks), the temporal embeddedness (longterm exchange relationships), the normative embeddedness (solidarity norms), and the embeddedness in power relations.

• DFG Programme: Research Grants