The Impact of Aggregate and Sectoral Fluctuations on Training Decisions
AbstractThe literature has not yet resolved whether the effect of macroeconomic fluctuations on training decisions is positive or negative. On the one hand, the opportunity cost to train is lower during downturns, and thus training should be counter-cyclical. On the other hand, a positive shock may be related to the adoption of new technologies and increased returns to skill, making training incidence pro-cyclical. Using the Canadian panel of Workplace and Employee Survey (WES), we document another important channel at work: the relative position of a sector also matters. We find not only that training moves counter-cyclically with the aggregate business cycle (more training during downturns), but also that the idiosyncratic sectoral shocks have a positive impact on training incidence (more training in sectors doing relatively better). These findings help us better understand training decisions by firms.
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Bibliographic InfoPaper provided by Vancouver School of Economics in its series CLSSRN working papers with number clsrn_admin-2009-54.
Length: 33 pages
Date of creation: 25 Oct 2009
Date of revision: 25 Oct 2009
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Web page: http://www.clsrn.econ.ubc.ca/
Training; Human capital; Business cycles; Sectoral shocks;
Other versions of this item:
- Caponi Vincenzo & Kayahan Burc & Plesca Miana, 2010. "The Impact of Aggregate and Sectoral Fluctuations on Training Decisions," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-37, October.
- Caponi, Vincenzo & Kayahan, Cevat Burc & Plesca, Miana, 2009. "The Impact of Aggregate and Sectoral Fluctuations on Training Decisions," IZA Discussion Papers 4042, Institute for the Study of Labor (IZA).
- Miana Plesca & Cevat Burc Kayahan & Vincenzo Caponi, 2010. "The Impact of Aggregate and Sectoral Fluctuations on Training Decisions," 2010 Meeting Papers 62, Society for Economic Dynamics.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-07 (All new papers)
- NEP-HRM-2009-11-07 (Human Capital & Human Resource Management)
- NEP-LAB-2009-11-07 (Labour Economics)
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