Does Further Education lead to Career Advancement? Non-Formal Further Training and Labour Market Mobility in Germany

Abstract

Politicians and the business leaders regularly stress the importance of (further) education for individual life chances. Still, it is far from clear whether non-formal further training, i. e. short training courses, which are the most common forms of further education in Germany, lead to career advancement. In this study, we analyze the impact of non-formal further training on labor market mobility using data from the German National Educational Panel Study (NEPS) over the period from 2009 to 2016. Event history models for discrete time intervals show that employer-provided courses reduce mobility and promote career stability, which contradicts hypotheses derived from human capital theory, which is commonly used in the literature. More concretely, employer-provided courses prevent downward mobility (safety net function), but also reduce upward mobility and firm changes. Based on these findings, we suggest that future research should consider transaction costs and the firm context as well as the distinction between employer-provided and non-employer-provided training.