E43

Why do low-skilled workers invest less in further training?

Didier Fouarge, Trudie Schils, Andries De Grip
Maastricht University, The Netherlands

Several studies document the fact that low-skilled workers participate less often in further training than high-skilled workers; however, few studies explain why. We fill this gap by investigating two explanations: low-skilled workers invest less in training 1) because of the lower private returns to these investments or 2) because they lack the intrinsic motivation to participate in training. Controlling for unobserved heterogeneity and endogenous selection into training, we find that the returns to training for low-skilled workers are not significantly different from those for high-skilled workers. However, low-skilled workers are significantly less motivated to participate in training. Differences in both economic preferences (future orientation, preference for leisure) and personality traits (locus of control, exam anxiety, and openness to new experiences) between high- and low-skilled workers largely explain the difference in intrinsic motivation.

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