The effect of quantitative and qualitative training on labour demand in Belgium: a monopolistic competition approach
AbstractThe objective of this paper is to model and estimate the impact of labour training financed by the firm on labour demand in Belgium, introducing training potential productivity and cost effects. To model this influence, we assume profit maximizing firms producing under a short run monopolistic competition regime. We emphasize that training variables, both qualitative and quantitative, can either increase labour demand through their positive effect on labour physical productivity net from the dropping price required to sell additional production, and that they can decrease labour demand through induced increasing direct labour costs and wages. GMM estimations on a panel of 269 firms observed during the period 1998-2004 show non significant impacts of training variables on labour demand, the productivity and cost effects seeming to offset each other. These results allow us to suggest two scenarios in terms of firms and workers behaviour and that subsidiary training could favour employment under the two assumptions that firms don’t transform training in an increased productivity – wage mark-up, but convert additional productivity in employment, and workers don’t claim for higher wages as a result of additional productivity.
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Bibliographic InfoPaper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Economics of Education Working Paper Series with number 0021.
Length: 23 pages
Date of creation: May 2008
Date of revision:
Training; Labour Demand; Human capital; Labour Productivity; Panel Data;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- M53 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Training
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-31 (All new papers)
- NEP-BEC-2008-05-31 (Business Economics)
- NEP-EEC-2008-05-31 (European Economics)
- NEP-HRM-2008-05-31 (Human Capital & Human Resource Management)
- NEP-LAB-2008-05-31 (Labour Economics)
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