Evaluating firm training, effects on performance and labour demand
AbstractA quality-adjusted measure of labour is developed, where labour efficiency depends on firm training. This specification is integrated into a flexible neoclassical cost function, representing the firm's production technology. Unlike traditional production functions, the cost function does not constrain all inputs to be substitutes and it allows capital to be fixed in the short run. These features are found to be important in the evaluation of the indirect effects of training. Short-run indirect effects arise through the relative price mechanism; an increase in labour efficiency decreases the quality-adjusted price of labour. Long-run indirect effects stem from the equilibrium adjustment of the quasi-fixed capital stock. The methodology is illustrated by means of a small firm panel data set. The results show that previous analyses have been overly restrictive in assuming all inputs to be substitutes. E.g., labour and capital are found to be long-run complements, implying that training increases long run labour demand, although the short-run effect is negative. The training outcomes are imprecisely estimated, but indicate that cost savings and productivity gains can be substantial.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics Letters.
Volume (Year): 6 (1999)
Issue (Month): 7 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEL20
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Gérard Ballot & Fathi Fakhfakh & Erol Taymaz, 2002. "Who benefits from training and R&D: The firm or the workers? A study on panels of French and Swedish firms," ERC Working Papers 0201, ERC - Economic Research Center, Middle East Technical University, revised Jan 2002.
- Stern, David I., 2010.
Elsevier, vol. 69(7), pages 1471-1478, May.
- 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.
- 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.
- Andries de Grip & Inge Sieben, 2005. "The effects of human resource management on small firms' productivity and employees' wages," Applied Economics, Taylor & Francis Journals, vol. 37(9), pages 1047-1054.
- Maliranta, Mika & Asplund, Rita, 2007. "Training and Hiring Strategies to Improve Firm Performance," Discussion Papers 1105, The Research Institute of the Finnish Economy.
- Håkanson, Christina & Johanson, Satu & Mellander, Erik, 2003. "Employer-Sponsored Training in Stabilisation and Growth Policy Perspectives," Working Paper Series 592, Research Institute of Industrial Economics.
- Mellander, Erik, 1999. "The multi-dimensional nature of labor demand and skill-biased technical change," Working Paper Series 1999:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- repec:ner:maastr:urn:nbn:nl:ui:27-13262 is not listed on IDEAS
- Erik Mellander, 2000. "The Multi-Dimensional Nature of Labor Demand and Skill-Biased Technical Change," Econometric Society World Congress 2000 Contributed Papers 0671, Econometric Society.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.