- The Oxford Handbook of Skills and Training
- List of Contributors
- Introduction: Skills and Training: Multiple Targets, Shifting Terrain
- Disciplinary Perspectives on Skill
- Skill Builders and the Evolution of National Vocational Training Systems
- The Changing Meaning of Skill: Still Contested, Still Important
- A New Social Construction of Skill
- Measuring Job Content: Skills, Technology, and Management Practices
- Accreditation and Assessment in Vocational Education and Training
- Education and Qualifications as Skills
- Pre-Employment Skill Formation in Australia and Germany
- Skill Development in Middle-level Occupations: The Role of Apprenticeship Training
- What Is Expected of Higher Education Graduates in the Twenty-first Century?
- Employer-Led In-Work Training and Skill Formation: The Challenges of Multi-Varied and Contingent Phenomena
- Unions, the Skills Agenda, and Workforce Development
- A Working Lifetime of Skill and Training Needs
- Skill Under-utilization
- Business Strategies and Skills
- Measuring Skills Stock, Job Skills, and Skills Mismatch
- The Individual Benefits of Investing in Skills
- The Economic and Social Benefits of Skills
- Theorizing Skill Formation in the Global Economy
- Different National Skill Systems
- Skill Ecosystems
- Employment Systems, Skills, and Knowledge
- Skill Demands and Developments in the Advanced Economies
- Approaches to Skills in the Asian Developmental States
- Emerging Economic Powers: The Transformation of the Skills Systems in China and India
- Projecting the Impact of Information Technology on Work and Skills in the 2030s
- International Skill Flows and Migration
- Professional Skills: Impact of Comparative Political Economy
- Skills and Training for the Older Population: Training the New Work Generation
- Rethinking Skills Development: Moving Beyond Competency-Based Training
- Who Pays for Skills?: Differing Perspectives on Who Should Pay and Why
- Current Challenges: Policy Lessons and Implications
- Author Index
Abstract and Keywords
This chapter considers returns to the individual from investing in skill. It describes the earnings and employment outcomes of people who have completed different levels of formal education across different countries, and goes on to consider the possible causal mechanisms at work. The methodology for estimating wage returns is critically discussed. Whilst much attention has been devoted to considering ability bias, other issues have received less attention. In particular qualifications or amounts of time spent studying are imperfect proxies for skills produced. Furthermore estimates from wage regressions are almost invariably interpreted through the lens of human capital theory -- the existence of a wage premium indicates that the productivity has increased due to the educational investment. Alternative interpretations are considered. These include the possibility that the premium represents a reward for obtaining a job on a fixed distribution of jobs -- in other words winning a positional competition race. Such possibilities raise several concerns. These include under-utilisation, both of general skills and of skills acquired through work-based training programmes, low marginal returns relative to average returns, and a widening and more risky distribution of payoffs.
Craig Holmes is a labour economist at Pembroke College, Oxford University; Research Fellow on the Employment, Equity, and Growth programme with INET Oxford; and Research Associate of the Centre on Skills, Knowledge and Organizational Performance (SKOPE) also at Oxford University. His research interests include earnings inequality, social mobility, behavioural economics, and the economics of education, skills, and skills policy.
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