Economic Benefits of Lifelong Learning

This paper examines the effect of lifelong learning on men’s employment and wages. Using data from the British Household Panel Survey, a variant of the mover-stayer model is developed in which hourly wages are either taken from a stationary distribution (movers) or are closely related to the hourly wage one year earlier (stayers). Mover-stayer status is not observed and we therefore model wages using an endogenous switching regression, extended to take account of non random selection into employment. The model is estimated by maximum likelihood, using generalised residuals to correct for possible endogeneity of lifelong learning decisions. The results show modest effects significant at a 10% level for men who undertake life-long learning without upgrading their educational status and more powerful and significant effects for those who do upgrade their status. For the latter, the influence of lifelong learning on employment prospects is an important influence on the overall return.