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The incentives to invest in job training : do strict labor codes influence this decision?

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  • Almeida, Rita
  • Aterido, Reyes

Abstract

This paper studies the link between labor market regulations and the incentives of firms to invest in the human capital of their employees. The author's explore a firm level data set across several developing countries and comparethe supply of formal training programs for firms exposed to different degrees of de facto labor regulations. The author's findings show that a more flexible labor code tends to be associated with a smaller investment in job training. However, this effect is small and heterogeneous. Reforms that simultaneously accelerate the diffusion of temporary contracts and increase the protection of permanent workers tend to generate negative effects on the firm's investment in human capital.

Suggested Citation

  • Almeida, Rita & Aterido, Reyes, 2008. "The incentives to invest in job training : do strict labor codes influence this decision?," Social Protection Discussion Papers and Notes 46189, The World Bank.
    • Handle: RePEc:wbk:hdnspu:46189
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    References listed on IDEAS

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    1. Hong Tan & Lopez-Acevedo, Gladys, 2003. "Mexico : in-firm training for the knowledge economy," Policy Research Working Paper Series 2957, The World Bank.
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    Cited by:

    1. Rita K. Almeida, 2010. "Openness and Technological Innovation in East Asia: Have They Increased the Demand for Skills?," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 17(1), pages 63-95, June.
    2. Aleksynska, Mariya., 2014. "Deregulating labour markets : how robust is the analysis of recent IMF working papers?," ILO Working Papers 994849663402676, International Labour Organization.
    3. Milan Vodopivec, 2013. "Introducing unemployment insurance to developing countries," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    4. Zara Liaqat & Jeffrey B. Nugent, 2016. "When Do Firms Choose to Train? The Roles of Labour Regulations, Their Enforcement, and Firm and Industry Characteristics," Journal of Development Studies, Taylor & Francis Journals, vol. 52(2), pages 224-241, February.
    5. Kuddo, Arvo, 2009. "Structural educational reform : evidence from a teacher's displacement program in Armenia," Social Protection Discussion Papers and Notes 47164, The World Bank.
    6. Milan Vodopivec & Lilijana Madjar & Primoz Dolenc, 2009. "Non-performance of the Severance Pay Program in Slovenia," Financial Theory and Practice, Institute of Public Finance, vol. 33(1), pages 89-102.
    7. Woolford, Geoff, 2009. "Social protection for migrants from the Pacific Islands in Australia and New Zealand," Social Protection Discussion Papers and Notes 49174, The World Bank.
    8. Janjua, Yasin & Mohammad, Irfan, 2008. "Situation Analysis to Support the Programme Design Process for National Skills Strategy of the Islamic Republic of Pakistan," MPRA Paper 38153, University Library of Munich, Germany.
    9. Chae, ChangKyun & Chung, Jaeho, 2009. "Pre-employment vocational education and training in Korea," Social Protection Discussion Papers and Notes 52186, The World Bank.
    10. Makhema, Mpho, 2009. "Social protection for refugees and asylum seekers in the Southern Africa Development Community (SADC)," Social Protection Discussion Papers and Notes 49168, The World Bank.
    11. Rita Almeida & Pedro Carneiro, Renata Narita, 2013. "Producing Higher Quality Jobs: Enforcement of Mandated Benefits across Brazilian Cities between 1996-2007," Working Papers, Department of Economics 2013_22, University of São Paulo (FEA-USP).
    12. Carpio, Susana & Giuliodori, David & Rucci, Graciana & Stucchi, Rodolfo, 2011. "The Effect of Temporary Contracts on Human Capital Accumulation in Chile," IDB Publications (Working Papers) 3030, Inter-American Development Bank.
    13. Avato, Johanna & Koettl, Johannes & Sabates-Wheeler, Rachel, 2009. "Definitions, good practices, and global estimates on the status of social protection for international migrants," Social Protection Discussion Papers and Notes 49172, The World Bank.
    14. Holzmann, Robert, 2010. "Bringing financial literacy and education to low and middle income countries : the need to review, adjust, and extend current wisdom," Social Protection Discussion Papers and Notes 56501, The World Bank.
    15. Susana Carpio & David Giuliodori & Graciana Rucci & Rodolfo Stucchi, 2011. "The Effect of Temporary Contracts on Human Capital Accumulation in Chile," IDB Publications (Working Papers) 35358, Inter-American Development Bank.
    16. Piggott, John & Sane, Renuka, 2009. "Indexing pensions," Social Protection Discussion Papers and Notes 52445, The World Bank.
    17. Ferrer, Ana M. & Riddell, W. Craig, 2009. "Unemployment insurance savings accounts in Latin America : overview and assessment," Social Protection Discussion Papers and Notes 49173, The World Bank.
    18. repec:ilo:ilowps:484966 is not listed on IDEAS
    19. James, Estelle, 2009. "Rethinking survivor benefits," Social Protection Discussion Papers and Notes 52919, The World Bank.
    20. Aleksynska, Mariya. & Cazes, Sandrine., 2014. "Comparing indicators of labour market regulations across databases : a post scriptum to the employing workers debate," ILO Working Papers 994854523402676, International Labour Organization.
    21. Zara Liaqat & Jeffrey Nugent, 2015. "Under-provision of private training by MENA firms: what to Do about It?," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-29, December.
    22. Koettl, Johannes, 2009. "Human trafficking, modern day slavery, and economic exploitation," Social Protection Discussion Papers and Notes 49802, The World Bank.
    23. Woo, Kye Lee, 2009. "Productivity increases in SMEs : with special emphasis on in-service training of workers in Korea," Social Protection Discussion Papers and Notes 51251, The World Bank.
    24. repec:ilo:ilowps:485452 is not listed on IDEAS
    25. Lord, Janet & Posarac, Aleksandra & Nicoli, Marco & Peffley, Karen & Mcclain-Nhlapo, Charlotte & Keogh, Mary, 2010. "Disability and international cooperation and development : a review of policies and practices," Social Protection Discussion Papers and Notes 56092, The World Bank.

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