The Development of Employers’ Training Investments Over Time – A Decomposition Analysis Using German Establishment Data

Summary Using establishment data covering the time period 1997 to 2007, this paper investigates trends of employer-sponsored further training in Germany, with a focus on the share of establishments investing in training. In West and East Germany alike, I find a positive time trend in the share of training active establishments. Applying Oaxaca-Blinder decomposition techniques shows that changes in some establishment characteristics affect the trend, however, not only in a positive way.While the increase of the fraction of skilled workers, changes in industry composition and the risen share of innovative establishments contribute positively to the trend, the decreased fraction of establishments engaged in collective bargaining operates in the opposite direction. In spite of these findings, the overall characteristics effect is rather small.