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Employer-Provided Training and Productivity : Evidence from a Panel of Japanese Firms

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  • Morikawa, Masayuki

Abstract

This study presents evidence on the quantitative relationship between employer-provided training and productivity among Japanese firms. The important contributions of this study are its construction of a panel of training stock at the firm-level, its distinction between manufacturing and service firms, and its comparison of the relative contribution of training to productivity and wages. The results indicate, first, that training significantly contributes to the labor productivity of the firm. Second, the estimated elasticity of productivity with respect to training stock is greater for service firms than for manufacturing firms. Third, the elasticities of productivity and wages to training stock are similar in size, meaning that the returns to firms' training investments are shared by their workers in proportion to the wage share of the value-added. These results suggest that policies to promote firms' training investments have the potential to improve productivity and wages, particularly for firms in service sector.

Suggested Citation

  • Morikawa, Masayuki, 2019. "Employer-Provided Training and Productivity : Evidence from a Panel of Japanese Firms," SSPJ Discussion Paper Series DP18-010, Service Sector Productivity in Japan: Determinants and Policies, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:sspjdp:dp18-010
    Note: This paper is based on joint research with the Research Institute of Economy, Trade and Industry (RIETI).
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    References listed on IDEAS

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    Cited by:

    1. Xinwei Dong & Dean R. Hyslop & Daiji Kawaguchi, 2022. "Training, Productivity and Wages: Direct Evidence from a Temporary Help Agency," CIRJE F-Series CIRJE-F-1195, CIRJE, Faculty of Economics, University of Tokyo.
    2. Shadrack Muthami Mwatu, 2022. "Institutions and export performance: firm level evidence from Kenya," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 69(4), pages 487-506, December.

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    More about this item

    Keywords

    Training; Labor productivity; Wage; Service sector; Intangible assets;
    All these keywords.

    JEL classification:

    • 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
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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