[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/uwp/jhriss/v57y2022i4p1311-1349.html
   My bibliography  Save this article

Locus of Control and Investment in Training

Author

Listed:
  • Marco Caliendo
  • Deborah A. Cobb-Clark
  • Cosima Obst
  • Helke Seitz
  • Arne Uhlendorff
Abstract
We extend standard models of work-related training by explicitly incorporating workers’ locus of control into the investment decision through the returns they expect. Our model predicts that higher internal control results in increased take-up of general, but not specific, training. This prediction is empirically validated using data from the German Socioeconomic Panel (SOEP). We provide empirical evidence that locus of control influences participation in training through its effect on workers’ expectations about future wage increases rather than actual wage increases. Our results provide an important explanation for underinvestment in training and suggest that those with an external sense of control may require additional training support.

Suggested Citation

  • Marco Caliendo & Deborah A. Cobb-Clark & Cosima Obst & Helke Seitz & Arne Uhlendorff, 2022. "Locus of Control and Investment in Training," Journal of Human Resources, University of Wisconsin Press, vol. 57(4), pages 1311-1349.
    • Handle: RePEc:uwp:jhriss:v:57:y:2022:i:4:p:1311-1349
    Note: DOI: 10.3368/jhr.57.4.0318-9377R2
    as

    Download full text from publisher

    File URL: http://jhr.uwpress.org/cgi/reprint/57/4/1311
    Download Restriction: A subscripton is required to access pdf files. Pay per article is available.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Taehyun Ahn, 2015. "Locus Of Control And Job Turnover," Economic Inquiry, Western Economic Association International, vol. 53(2), pages 1350-1365, April.
    2. Daron Acemoglu & Jörn-Steffen Pischke, 1998. "Why Do Firms Train? Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 79-119.
    3. Carla Haelermans & Lex Borghans, 2012. "Wage Effects of On-the-Job Training: A Meta-Analysis," British Journal of Industrial Relations, London School of Economics, vol. 50(3), pages 502-528, September.
    4. Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), 2011. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 4, number 4, June.
    5. Didier Fouarge & Trudie Schils & Andries de Grip, 2013. "Why do low-educated workers invest less in further training?," Applied Economics, Taylor & Francis Journals, vol. 45(18), pages 2587-2601, June.
    6. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    7. Wolter, Stefan C. & Ryan, Paul, 2011. "Apprenticeship," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 3, chapter 11, pages 521-576, Elsevier.
    8. Peter, Frauke H. & Zambre, Vaishali, 2017. "Intended college enrollment and educational inequality: Do students lack information?," Economics of Education Review, Elsevier, vol. 60(C), pages 125-141.
    9. Marco Caliendo & Deborah A. Cobb-Clark & Arne Uhlendorff, 2015. "Locus of Control and Job Search Strategies," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 88-103, March.
    10. Judith Offerhaus, 2013. "The Type to Train?: Impacts of Personality Characteristics on Further Training Participation," SOEPpapers on Multidisciplinary Panel Data Research 531, DIW Berlin, The German Socio-Economic Panel (SOEP).
    11. Richard Blundell & Lorraine Dearden & Costas Meghir & Barbara Sianesi, 1999. "Human capital investment: the returns from education and training to the individual, the firm and the economy," Fiscal Studies, Institute for Fiscal Studies, vol. 20(1), pages 1-23, March.
    12. Lisa M. Lynch & Sandra E. Black, 1998. "Beyond the Incidence of Employer-Provided Training," ILR Review, Cornell University, ILR School, vol. 52(1), pages 64-81, October.
    13. Jaik, Katharina & Wolter, Stefan C., 2016. "Lost in Transition: The Influence of Locus of Control on Delaying Educational Decisions," IZA Discussion Papers 10191, Institute of Labor Economics (IZA).
    14. Rita Asplund, 2005. "The Provision and Effects of Company Training: A Brief Review of the Literature," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 47-73.
    15. Margo Coleman & Thomas DeLeire, 2003. "An Economic Model of Locus of Control and the Human Capital Investment Decision," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
    16. Rémi Piatek & Pia Pinger, 2016. "Maintaining (Locus of) Control? Data Combination for the Identification and Inference of Factor Structure Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(4), pages 734-755, June.
    17. Cobb-Clark, Deborah A. & Kassenboehmer, Sonja C. & Sinning, Mathias G., 2016. "Locus of control and savings," Journal of Banking & Finance, Elsevier, vol. 73(C), pages 113-130.
    18. Groves, Melissa Osborne, 2005. "How important is your personality? Labor market returns to personality for women in the US and UK," Journal of Economic Psychology, Elsevier, vol. 26(6), pages 827-841, December.
    19. Hansemark, Ove C., 2003. "Need for achievement, locus of control and the prediction of business start-ups: A longitudinal study," Journal of Economic Psychology, Elsevier, vol. 24(3), pages 301-319, June.
    20. Hashimoto, Masanori, 1981. "Firm-Specific Human Capital as a Shared Investment," American Economic Review, American Economic Association, vol. 71(3), pages 475-482, June.
    21. Daron Acemoglu, 1997. "Training and Innovation in an Imperfect Labour Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(3), pages 445-464.
    22. Edward P. Lazear, 2009. "Firm-Specific Human Capital: A Skill-Weights Approach," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 914-940, October.
    23. Katz, Eliakim & Ziderman, Adrian, 1990. "Shared investment in general training : the role of information," Policy Research Working Paper Series 535, The World Bank.
    24. Giorgio Brunello & Pietro Garibaldi & Etienne Wasmer, 2007. "Education and training in Europe," SciencePo Working papers Main hal-03415950, HAL.
    25. Anke S. Kessler & Christoph Lülfesmann, 2006. "The Theory of Human Capital Revisited: on the Interaction of General and Specific Investments," Economic Journal, Royal Economic Society, vol. 116(514), pages 903-923, October.
    26. Matthew Wiswall & Basit Zafar, 2015. "Determinants of College Major Choice: Identification using an Information Experiment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(2), pages 791-824.
    27. Semykina, Anastasia & Linz, Susan J., 2007. "Gender differences in personality and earnings: Evidence from Russia," Journal of Economic Psychology, Elsevier, vol. 28(3), pages 387-410, June.
    28. Alison L. Booth & Mark L. Bryan, 2007. "Who Pays for General Training in Private Sector Britain?," Research in Labor Economics, in: Aspects of Worker Well-Being, pages 85-123, Emerald Group Publishing Limited.
    29. Katz, Eliakim & Ziderman, Adrian, 1990. "Investment in General Training: The Role of Information and Labour Mobility," Economic Journal, Royal Economic Society, vol. 100(403), pages 1147-1158, December.
    30. Cobb-Clark, Deborah A. & Kassenboehmer, Sonja C. & Schurer, Stefanie, 2014. "Healthy habits: The connection between diet, exercise, and locus of control," Journal of Economic Behavior & Organization, Elsevier, vol. 98(C), pages 1-28.
    31. Booth, Alison & Zoega, Gylfi, 2000. "Why Do Firms Invest in General Training? 'Good' Firms and 'Bad' Firms as a Source of Monopsony Power," CEPR Discussion Papers 2536, C.E.P.R. Discussion Papers.
    32. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute of Labor Economics (IZA).
    33. Wiji Arulampalam & Alison L. Booth, 1997. "Who gets over the training hurdle? A study of the training experiences of young men and women in Britain," Journal of Population Economics, Springer;European Society for Population Economics, vol. 10(2), pages 197-217.
    34. repec:taf:applec:45:y:2013:i:18:p:2587-2601 is not listed on IDEAS
    35. repec:eme:rlepps:v:18:y:1999:i:1999:p:303-330 is not listed on IDEAS
    36. Heineck, Guido & Anger, Silke, 2010. "The returns to cognitive abilities and personality traits in Germany," Labour Economics, Elsevier, vol. 17(3), pages 535-546, June.
    37. Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
    38. Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), 2011. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 3, number 3, June.
    39. Hans Gersbach & Armin Schmutzler, 2012. "Product markets and industry-specific training," RAND Journal of Economics, RAND Corporation, vol. 43(3), pages 475-491, September.
    40. Andrew D. McGee, 2015. "How the Perception of Control Influences Unemployed Job Search," ILR Review, Cornell University, ILR School, vol. 68(1), pages 184-211, January.
    41. Stevens, Margaret, 1994. "An Investment Model for the Supply of Training by Employers," Economic Journal, Royal Economic Society, vol. 104(424), pages 556-570, May.
    42. Chang, Chun & Wang, Yijiang, 1996. "Human Capital Investment under Asymmetric Information: The Pigovian Conjecture Revisited," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 505-519, July.
    43. Edwin Leuven, 2005. "The Economics of Private Sector Training: A Survey of the Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 19(1), pages 91-111, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Caliendo, Marco & Cobb-Clark, Deborah A. & Pfeifer, Harald & Uhlendorff, Arne & Wehner, Caroline, 2024. "Managers’ risk preferences and firm training investments," European Economic Review, Elsevier, vol. 161(C).
    2. John S Heywood & Uwe Jirjahn & Annika Pfister, 2020. "Product market competition and employer provided training in Germany," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 29(2), pages 533-556.
    3. Deborah Cobb-Clark, 2015. "Locus of control and the labor market," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-19, December.
    4. Szabó-Morvai, Ágnes & Kiss, Hubert János & Károlyi, Róbert, 2023. "Kontrollhely Magyarországon - egy reprezentatív felmérés eredményei [Locus of Control in Hungary: The results of a representative survey]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 847-871.
    5. Xue, Sen & Kidd, Michael P. & Le, Anh.T. & Kirk, Kathy & Martin, Nicholas G., 2020. "The role of locus of control in adulthood outcomes: Evidence from Australian twins," Journal of Economic Behavior & Organization, Elsevier, vol. 179(C), pages 566-588.
    6. Rita Asplund, 2005. "The Provision and Effects of Company Training: A Brief Review of the Literature," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 47-73.
    7. Dan A. Black & Lars Skipper & Jeffrey A. Smith & Jeffrey Andrew Smith, 2023. "Firm Training," CESifo Working Paper Series 10268, CESifo.
    8. Xue, Sen & Kidd, Michael P. & Le, Anh T. & Kirk, Kathy & Martin, Nicholas G., 2019. "The Role of Locus of Control in Education, Occupation, Income and Healthy Habits: Evidence from Australian Twins," GLO Discussion Paper Series 371, Global Labor Organization (GLO).
    9. Christos Bilanakos & Colin P. Green & John S. Heywood & Nikolaos Theodoropoulos, 2017. "Do Dominant Firms Provide More Training?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(1), pages 67-95, February.
    10. Szabó-Morvai Ágnes & Hubert János Kiss, 2020. "Locus of control and Human Capital Investment Decisions: The Role of Effort, Parental Preferences and Financial Constraints," CERS-IE WORKING PAPERS 2055, Institute of Economics, Centre for Economic and Regional Studies.
    11. Pfeifer, Christian & Janssen, Simon & Yang, Philip & Backes-Gellner, Uschi, 2010. "Training Participation of an Aging Workforce in an Internal Labor Market," Hannover Economic Papers (HEP) dp-447, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    12. Asplund, Rita, 2004. "The Provision and Effects of Company Training. A brief review of the literature," Discussion Papers 907, The Research Institute of the Finnish Economy.
    13. Dietz, Daniel & Zwick, Thomas, 2016. "The retention effect of training: Portability, visibility, and credibility," ZEW Discussion Papers 16-011, ZEW - Leibniz Centre for European Economic Research.
    14. By Barbara Mueller & Jürg Schweri, 2015. "How specific is apprenticeship training? Evidence from inter-firm and occupational mobility after graduation," Oxford Economic Papers, Oxford University Press, vol. 67(4), pages 1057-1077.
    15. Pinger, Pia & Schäfer, Sebastian & Schumacher, Heiner, 2018. "Locus of control and consistent investment choices," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 75(C), pages 66-75.
    16. Yanick Labrie & Claude Montmarquette, 2005. "La formation qualifiante et transférable en milieu de travail," CIRANO Project Reports 2005rp-04, CIRANO.
    17. Caliendo, Marco & Cobb-Clark, Deborah A. & Obst, Cosima & Uhlendorff, Arne, 2023. "Risk preferences and training investments," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 668-686.
    18. Steffes, Susanne & Warnke, Arne Jonas, 2019. "Determinants of work-related training: An investigation of observed and unobserved firm-, job- and worker-heterogeneity," ZEW Discussion Papers 19-022, ZEW - Leibniz Centre for European Economic Research.
    19. Caliendo, Marco & Cobb-Clark, Deborah A. & Hennecke, Juliane & Uhlendorff, Arne, 2019. "Locus of control and internal migration," Regional Science and Urban Economics, Elsevier, vol. 79(C).
    20. Rao, Neel, 2015. "General training in labor markets: Common value auctions with unobservable investment," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 19-45.

    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uwp:jhriss:v:57:y:2022:i:4:p:1311-1349. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://jhr.uwpress.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.