Employees older than 55 years of age have a much lower share in training than other employees. The purpose of this paper is to propose that one of the reasons for this phenomenon that has not been taken into account so far is that their training is less effective.
This paper shows that training of older employees indeed is less effective in the self-assessment of training participants. Training effectiveness is measured with respect to key dimensions such as career development, earnings, adoption of new skills, flexibility or job security. Besides age a broad range of explanatory variables is included as covariates in a large linked employer-employee data set.
The paper finds that main reason for the differences in training effectiveness during the life cycle is that firms do not take into account differences in training motivation. Older employees get higher returns from informal and directly relevant training and from training contents that can be mainly tackled by crystallised abilities. Training incidence in the more effective training forms is, however, not higher for older employees. Given that other decisive variables on self-assessed effectiveness such as training duration, financing and initiative are not sensitive to age, the wrong allocation of training contents and training forms therefore is the critical explanation for the lower effectiveness of training.
This paper therefore shows to human resource managers why old employees rate training effectiveness lower and indicates what can be done in order to improve training effectiveness of old employees. It uses a large and detailed data set entailing more than 6,000 employees from about 150 establishments.
JEL Classification – J10, J24, J28
The author thanked David Bills, Ruth Kanfer, Christian Stamov-Rossnagel, Ursula Staudinger and Sven Voelpel for helpful comments. The author also thanked the Research Data Centre (FDZ) of the Federal Employment Agency at the Institute for Employment Research for the provision of the data set and its useful documentation. The data basis of this publication is the “Berufliche Weiterbildung als Bestandteil Lebenslangen Lernens” panel data set (WeLL) (first two waves). Data access was via the scientific user file provided by FDZ.
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