The training of school-leavers - Complementarity or substitution?

In theoretical discussions about the relation between education and trainin g, the question of complementarity or substitutability between these two di fferent forms of human capital is raised. If initial education and industri al training are substitutes, overeducated workers will participate less in additional training than workers who are adequately educated. It could expl ain the persistence of overeducation and implies that the social wastage of overeducation will be less. On the other hand, if initial education and in dustrial training are complements, existing differences in human capital wi ll only increase by industrial training, implying the risk for some workers of 'missing the boat'. Supplementary to Groot we not only look at the impa ct of over- and undereducation (level) but also at non-matching fields of s tudies and the 'narrowness' of types of education. A sample of labour marke t entrants was used, so we did not have to cope with the disturbing influen ce of other forms of human capital: life and labour market experience. The paper gives evidence in support of both substitutability and complementarit y between initial education and firm training. (C) 2000 Elsevier Science Lt d. All rights reserved. JEL classification: I21; J24.