In this project the knowledge of employer and worker heterogeneity shall be deepened and especially the effects of heterogeneity on wages, productivity, employment changes and labour demand are to be examined. The analysis of heterogeneous continuing training effects on employees will be augmented with an analysis of effects on the firm productivity and the distribution of the returns to further education between employers and employees. Furthermore the employees mobility decisions and their effects on the earning profile will be analyzed and the mobility effects on employers training attitudes as well as the heterogeneous labour demand shall be modelled. In addition to heterogeneous wage effects also heterogeneous productivity effects shall be detected with the measurement of effects of different further education measures. Here we allow for the selectivity problem of continuing training. We plan to build and empirically implement a decision-theoretical model for the training decision of the firms to identify private and social returns to training, which also allows differentiating between diverse training motives of firms. This analysis is rounded of by an efficiency analyses and the necessity of governmental interventions in education and continuing training decisions. Heterogeneities play also in connection with mobility and labour demand an important role. Based on new theoretical hypothesis an in-depth analysis of mobility and earning profiles is part of our research program. Insights into employee-sided heterogeneity and mobility decisions are used to develop theoretical and empirical equilibrium considerations in the framework of labour demand estimations taking into account incomplete information. Here we consider also general institutional regulations like the collective bargaining autonomy by taking union decisions into account. This theoretical framework also allows us to highlight international differences in the development of unemployment and wage inequalities against the background of different labour market institutions.