The Training of School-leavers: Complementarity or Substitution?

In theoretical discussions about the relation between education and training, the question of complementarity or substitutability between these two different forms of human capital is raised. If initial education and industrial training are substitutes, overeducated workers will participate less in additional training than workers who are adequately educated. It could explain the persistence of overeducation and implies that the social wastage of overeducation will be less. On the other hand, if initial education and industrial training are complements, existing differences in human capital will only increase by industrial training, implying the risk for some workers of `missing the boat'. Supplementary to Groot we not only look at the impact of over- and undereducation (level) but also at non-matching fields of studies and the `narrowness' of types of education. A sample of labour market entrants was used, so we did not have to cope with the disturbing influence of other forms of human capital: life and labour market experience. The paper gives evidence in support of both substitutability and complementarity between initial education and firm training.