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Training And Establishment Survival

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  • William Collier
  • Francis Green
  • John Peirson

Abstract

Training decisions are affected by beliefs about the returns to training, surrounding which firms face considerable uncertainty. We model the consequent association between training, profitability and establishment survival. We propose a plausible definition of optimism about training effectiveness, and show that more optimistic firms train more. We then present estimates of the relationship between training and the likelihood of medium-term commercial survival. We find that increased training of non-manual workers in large establishments is associated with a greater chance of survival; however, disaggregation reveals that the association differs across occupational groups. In smaller establishments, increased training for Craft and Technical workers is associated with better chances of survival, while for Professional workers the opposite effect is found. Copyright (c) Scottish Economic Society 2005.

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Bibliographic Info

Article provided by Scottish Economic Society in its journal Scottish Journal of Political Economy.

Volume (Year): 52 (2005)
Issue (Month): 5 (November)
Pages: 710-735

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Handle: RePEc:bla:scotjp:v:52:y:2005:i:5:p:710-735

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References

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  1. Ann P. Bartel, 1995. "Training, Wage Growth and Job Performance: Evidence From a Company Database," NBER Working Papers 4027, National Bureau of Economic Research, Inc.
  2. Bartel, Ann P, 1995. "Training, Wage Growth, and Job Performance: Evidence from a Company Database," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 401-25, July.
  3. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June.
  4. Agarwal, Rajshree, 1996. "Technological activity and survival of firms," Economics Letters, Elsevier, vol. 52(1), pages 101-108, July.
  5. Alba-Ramirez, Alfonso, 1994. "Formal Training, Temporary Contracts, Productivity and Wages in Spain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(2), pages 151-70, May.
  6. John Bishop, 1994. "The Impact of Previous Training on Productivity and Wages," NBER Chapters, in: Training and the Private Sector, pages 161-200 National Bureau of Economic Research, Inc.
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Cited by:
  1. Asplund, Rita, 2004. "The Provision and Effects of Company Training. A brief review of the literature," Discussion Papers 907, The Research Institute of the Finnish Economy.
  2. Jed Devaro & Fidan Ana Kurtulus, 2011. "What types of organizations benefit from teams, and how do they benefit?," UMASS Amherst Economics Working Papers 2011-16, University of Massachusetts Amherst, Department of Economics.
  3. William Collier & Francis Green & Young-Bae Kim & John Peirson, 2008. "Education, Training and Economic Performance: Evidence from Establishment Survival Data," Studies in Economics 0822, Department of Economics, University of Kent.
  4. Metcalfe, Renuka & Sloane, Peter J., 2007. "Human Capital Spillovers and Economic Performance in the Workplace in 2004: Some British Evidence," IZA Discussion Papers 2774, Institute for the Study of Labor (IZA).
  5. Rita Asplund, 2005. "The Provision and Effects of Company Training: A Brief Review of the Literature," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 47-73.
  6. Almeida-Santos, Filipe & Mumford, Karen A., 2004. "Employee Training and Wage Compression in Britain," IZA Discussion Papers 1197, Institute for the Study of Labor (IZA).

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