Productivity, Wages, and the Returns to Firm-Provided Training: Fair Share Capitalism?
AbstractIn this study, we develop an alternative modelling that examines a) the determinants of firm productivity and wages and b) the internal rate of return (IRR) to firm training for both firms and workers. Using a six-year linked employer-employee dataset, our estimates indicate that an additional hour of training per worker results in an increase of 0.12% in productivity and 0.04% in wages, or an increase of 0.16% and 0.08%, respectively, if one uses firm training as a stock variable. We then find that 82% of the gains in productivity are captured by firms and 18% by workers. Given the training costs, we finally obtain an IRR of 13% for firms and 33% for workers at sample means. Firms are heterogeneous, and we do find that dispersion in the rates of return across firms is high.
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.
Bibliographic InfoPaper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2010-05.
Length: 37 pages
Date of creation: Apr 2010
Date of revision: Jul 2012
Publication status: Published in International Journal of Manpower 34(7): 776-793, 2013.
Firm-Provided Training; Internal Rate of Return; Human Capital; Productivity; Wages.;
Other versions of this item:
- Ana Sofia Lopes & Paulino Teixeira, 2013. "Productivity, wages, and the returns to firm-provided training: fair shared capitalism?," International Journal of Manpower, Emerald Group Publishing, vol. 34(7), pages 776 - 793, November.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- I2 - Health, Education, and Welfare - - Education
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-24 (All new papers)
- NEP-BEC-2010-04-24 (Business Economics)
- NEP-EFF-2010-04-24 (Efficiency & Productivity)
- NEP-HRM-2010-04-24 (Human Capital & Human Resource Management)
- NEP-LAB-2010-04-24 (Labour Economics)
- NEP-SBM-2010-04-24 (Small Business Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lorraine Dearden & Howard Reed & John Van Reenen, 2005.
"The impact of training on productivity and wages : evidence from British panel data,"
Economic History Working Papers
779, London School of Economics and Political Science, Department of Economic History.
- Lorraine Dearden & Howard Reed & John Van Reenen, 2006. "The Impact of Training on Productivity and Wages: Evidence from British Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 397-421, 08.
- Lorraine Dearden & Howard Reed & John Van Reenen, 2005. "The impact of training on productivity and wages: evidence from British panel data," IFS Working Papers W05/16, Institute for Fiscal Studies.
- Lorraine Dearden & Howard Reed & John Van Reenen, 2005. "The Impact of Training on Productivity and Wages: Evidence from British Panel Data," CEP Discussion Papers dp0674, Centre for Economic Performance, LSE.
- Ana Sofia Lopes & Paulino Teixeira, 2009. "Unobserved Worker Ability, Firm Heterogeneity, and the Returns to Schooling and Training," GEMF Working Papers 2009-03, GEMF - Faculdade de Economia, Universidade de Coimbra.
- Almeida, Rita & Carneiro, Pedro, 2009.
"The return to firm investments in human capital,"
Elsevier, vol. 16(1), pages 97-106, January.
- Almeida, Rita & Carneiro, Pedro, 2006. "The return to firm investment in human capital," Policy Research Working Paper Series 3851, The World Bank.
- Rita Almeida & Pedro Carneiro, 2005. "The return to firm investment in human capital," CeMMAP working papers CWP21/05, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Almeida, Rita & Carneiro, Pedro, 2008. "The return to firm investments in human capital," Social Protection Discussion Papers 44947, The World Bank.
- Budría, Santiago & Pereira, Pedro T., 2004. "On the Returns to Training in Portugal," IZA Discussion Papers 1429, Institute for the Study of Labor (IZA).
- Gérard Ballot & Fathi Fakhfakh & Erol Taymaz, 2006. "Who Benefits from Training and R&D, the Firm or the Workers?," British Journal of Industrial Relations, London School of Economics, vol. 44(3), pages 473-495, 09.
- Harley Frazis & Mark A. Loewenstein, 2005. "Reexamining the Returns to Training: Functional Form, Magnitude, and Interpretation," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
- Benoit Dostie & Pierre Thomas Léger, 2011.
"Firm-Sponsored Classroom Training: Is It Worth It For Older Workers?,"
Cahiers de recherche
11-06, HEC Montréal, Institut d'économie appliquée.
- Benoit Dostie & Pierre Thomas Léger, 2011. "Firm-Sponsored Classroom Training: Is It Worth It For Older Workers?," CIRANO Working Papers 2011s-69, CIRANO.
- Benoit Dostie & Pierre Thomas Léger, 2011. "Firm-Sponsored Classroom Training: is it Worth it for Older Workers ?," Cahiers de recherche 1136, CIRPEE.
- Dostie, Benoit & Léger, Pierre Thomas, 2011. "Firm-Sponsored Classroom Training: Is It Worth It for Older Workers?," IZA Discussion Papers 6123, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sara Santos).
If references are entirely missing, you can add them using this form.