Who Invests in Training if Contracts are Temporary? Evidence for Germany Using Selection Correction

The effects of fixed-term contracts on participation and financing of work-related training are analysed with data from the German Socio-Economic Panel (GSOEP). In contrast to previous literature, we especially distinguish between employer- and employee-sponsored training to allow for diverging investment patterns of worker and firm. In order to control for the selection bias arising from different characteristics of individuals with fixed-term and permanent contracts, a bivariate probit model is applied. The main findings are (i) that temporary workers are faced by lower investments, and (ii) that there are no differences with respect to employer- and employee-sponsored training