Santiago Budría

The wage effects of training in Portugal: differences across skill groups, genders, sectors and training types

This article investigates the determinants and wage effects of training in Portugal. In a first stage, we show that there are considerable differences in training participation across groups of workers, with elder and low educated individuals participating substantially less. In a second stage, we show that training has a positive and significant impact on wages. The estimated wage return is about 30% for men and 38% for women. Discriminating between levels of education and working experience and the public and private sector reveals important differences across categories of workers. We find that women, low educated workers and workers with long working experience earn larger returns from training. The average effect of training is similar in the private sector and the public sector. However, differences across experience groups are larger in the private sector, while differences across education groups are larger in the public sector. We use three alternative classifications of training activities and find that training in the firm, training aimed to improve skills needed at the current job and training with duration less than a year are associated to larger wage gains.

Schooling and the distribution of wages in the European private and public sectors

International research has shown that schooling enhances within-groups wage dispersion. This assessment is typically based on private sector data and, up to date, the inequality implications of schooling have not been documented for the public sector. This article uses recent data from eight European countries to explicitly take into account differences between the private and public sectors. Using quantile regression, the article describes the effects of schooling on the location and shape of the conditional wage distribution in each sector. While the average impact of schooling on wages is similar across sectors, the impact of schooling on within-groups dispersion is found to be substantially larger in the private sector than in the public sector. This finding warns that the effects of the European educational expansion on overall within-groups dispersion may be lower than previously thought.

Income deprivation and mental well-being: The role of non-cognitive skills

We show that the positive relation between income deprivation and mental health is affected by an individuals non-cognitive skills. Income deprivation is operationalized as the Yitzhaki index, i.e., as a function of the sum of income differences between an individual and others in her reference group who are more affluent. Non-cognitive skills are extracted from a Locus of Control questionnaire and the Big Five Inventory, a self-report measurement of an individual in regard to five aspects of personality: conscientiousness, neuroticism, extraversion, agreeableness and open-mindedness. The results, based on the 2002-2010 waves of the German Socio-Economic Panel dataset (SOEP), show that deprivation is negative and significantly related with mental health. However, neurotic individuals are more deprivation-sensitive than are others. Compared to the mean effect, a one standard deviation rise in neuroticism is associated with a deprivation effect that is 36.6% and 51.9% larger among men and women, respectively. Although to a lesser extent, extraverted men and conscientious women are also found to be more deprivation-sensitive than are others, the corresponding figures being 31.1% and 45.9%, respectively. These findings suggest that personality differences should be taken into account in the design of policies, practices and initiatives aimed at alleviating the well-being costs of income deprivation.

Overqualification, skill mismatches and wages in private sector employment in Europe

AbstractThis paper uses a sample of private sector male workers from the European Community Household Panel to examine the wage effects of educational mismatches across segments of the earnings distribution in 12 countries. We consider two types of mismatch, overqualification and skills mismatches. By differentiating between quantiles, we discriminate between groups of workers with different unobservable earnings conditions. We find that the detrimental effects of skill mismatches on wages are larger than those of overqualification in most segments of the earnings distribution. Moreover, we find that the pay penalty of educational mismatch tends to be higher among workers with higher unconditional wages. This finding suggests that the mismatch phenomenon entails wage losses over and above those attributable to unobservable earnings determinants, including ability and skills possessed by workers.