Explaining the training disadvantage of less-educated workers: the role of labor market allocation in international comparison

Abstract

Less-educated workers have the lowest participation rates in job-related further training across the industrialized world, but the extent of their disadvantage varies. Using data on 28 high- and middle-income countries, we assess different explanations for less-educated workers’ training disadvantage relative to intermediate-educated workers, with a focus on the role of labor market allocation (i.e. job tasks, other job features and firm characteristics). Shapley decompositions reveal a broadly similar pattern for all countries: differences in labor market allocation between less- and intermediate-educated workers are more important for explaining the training gap than differences in individual learning disposition (i.e. cognitive skills and motivation to learn). Our analysis further suggests that the training gap is related to educational and labor market institutions and that labor market allocation processes play a key role in mediating any institutional ‘effects’. Strong conclusions regarding the role of institutions are hampered by the small country-level sample, however.