Training, Wages, and the Human Capital Model

Using recent data from the National Longitudinal Survey of Youth, this study examines the predictions of the human capital model concerning the relationship between training, starting wages, and wage growth. As implied by the model, training, particularly employer‐financed training, is positively related to wage growth. Company‐financed training also appears to be portable across jobs or to have a general component. In addition, there is some evidence that workers pay for initial training through a reduced starting wage. The results provide partial support for the human capital model.