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Estimating the Returns to Firm-Sponsored on-the-Job and Classroom Training

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  • Benoit Dostie

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Abstract

In this paper, we estimate returns to classroom and on-the-job firm sponsored training in terms of value-added per worker using longitudinal linked employee-employer Canadian data from 1999 to 2006. We estimate a standard production function controlling for endogenous training decisions because of perceived net benefits and time-varying market conditions using dynamic panel GMM methods. We find that employees who undertook classroom training are 11 percent more productive than otherwise similar employees. We show that returns to on-the-job training are on average lower (3:4 percent). We provide evidence that these lower returns are due to on-the-job training being more closely related to turnover and more geared toward subjects that are less productivity-enhancing. Nous estimons dans cet article les rendements de la formation parrainée par l'employeur, en classe et en cours d'emploi, en termes de valeur ajoutée par travailleur en utilisant les données de l'Enquête sur le milieu de travail et les employés (EMTE) de Statistique Canada pour la période 1999-2006. Nous estimons une fonction de production où nous tenons compte de l'endogénéité des décisions de formation des entreprises due aux bénéfices escomptés et aux conditions de marché en utilisant une version dynamique de la méthode des moments généralisés. Nous trouvons que les employés ayant reçu de la formation en classe sont 11 % plus productif. Par contre, nous trouvons que les rendements de la formation en cours d'emploi sont inférieurs (3,4 %). Nous montrons que ces rendements inférieurs sont expliqués par le fait que la formation en cours d'emploi est reliée plus étroitement au roulement de la main d'oeuvre et que les sujets qui y sont traités ont moins d'impacts sur la productivité.

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Bibliographic Info

Paper provided by CIRANO in its series CIRANO Working Papers with number 2010s-44.

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Date of creation: 01 Oct 2010
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Handle: RePEc:cir:cirwor:2010s-44

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Keywords: Productivity; On-the-job training; Classroom training; Turnover; Linked employer-employee data; Productivité; formation en cours d'emploi; formation en classe; roulement de la main-d'oeuvre; données employeur-employé liées;

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