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Tax Incentives, On-the-job Training, and Human Capital Accumulation: Evidence from China

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  • Tian, Binbin
  • Lin, Chao
  • Zhang, Wenwen
  • Feng, Chen

Abstract

This study investigates the effects of an increase in the proportion of tax credit (IPTC) policy on firms' on-the-job-training expenses. We document that the IPTC significantly increases on-the-job training expenses; the result remains valid after a series of robustness tests. An analysis of heterogeneous effects shows that privately owned firms and small-scale firms are more susceptible to the IPTC's impacts than state-owned and large-scale firms. Finally, we find that the IPTC can improve the production efficiency of firms and promote firm performance and innovation.

Suggested Citation

  • Tian, Binbin & Lin, Chao & Zhang, Wenwen & Feng, Chen, 2022. "Tax Incentives, On-the-job Training, and Human Capital Accumulation: Evidence from China," China Economic Review, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:chieco:v:75:y:2022:i:c:s1043951x22001080
    DOI: 10.1016/j.chieco.2022.101850
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    More about this item

    Keywords

    Tax incentive; On-the-job training; Human capital;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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