Wages and On-the-Job Training in Tunisia
AbstractIn this paper, we conduct an econometric analysis of the links of on-the-job training (OJT) and worker remuneration in the area of Tunis using a case study data based on eight firms. We pay particular attention to the way the OJT cost may be shared between firms and workers. This is done through analysing the sign of various OJT variables and different wage information. This is important because training costs may be a major obstacle to intra-firm human capital accumulation in Tunisia. However, in this emerging economic context where severe tensions are present on the labour market, firms may be tempted to extract most of the labour relation surplus by having workers implicitly paying for their within-firm training. Our estimates show that: (1) The duration of former OJT negatively influences starting wages, while there is no anticipated effect of future training on wages at the firm entry; (2) Current wages are positively affected by former OJT but negatively affected by ongoing OJT; (3) Trend factors seem to much affect the influence of OJT on wages growth; (4) OJT main determinants are education, gender, family situation and firm characteristics, but neither experience nor tenure. Overall, our estimation results are consistent with popular human capital theory and broader OJT cost sharing theories. They suggest that firms bear much of the cost of OJT, which may jeopardize their profitability. Public subsidies for OJT programmes may be an appropriate policy response. However, the latter are sustainable only if they are supported by adequate public education systems, allowing efficient OJT within firms.
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wage; on-the-job training; matched worker-firm data; Tunisia;
Other versions of this item:
- 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
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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