Estimating the Returns to Firm-Sponsored On-the-Job and Classroom Training
AbstractIn 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.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5258.
Length: 37 pages
Date of creation: Oct 2010
Date of revision:
Publication status: published in: Journal of Human Capital, 2013, 7 (2), 161-189
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Other versions of this item:
- Benoit Dostie, 2013. "Estimating the Returns to Firm-Sponsored On-the-Job and Classroom Training," Journal of Human Capital, University of Chicago Press, vol. 7(2), pages 161 - 189.
- Benoit Dostie, 2010. "Estimating the Returns to Firm-Sponsored on-the-Job and Classroom Training," Cahiers de recherche 1040, CIRPEE.
- Benoit Dostie, 2010. "Estimating the Returns to Firm-Sponsored on-the-Job and Classroom Training," CIRANO Working Papers 2010s-44, CIRANO.
- Benoit Dostie, 2010. "Estimating the returns to firm-sponsored on-the-job and classroom training," Cahiers de recherche 10-06, HEC Montréal, Institut d'économie appliquée.
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-06 (All new papers)
- NEP-BEC-2010-11-06 (Business Economics)
- NEP-LAB-2010-11-06 (Labour Economics)
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