The investment in job training : why are SMEs lagging so much behind?
AbstractThis paper analyzes the link between firm size and the investment in job training by employers. Using a large firm level data set across 99 developing countries, we show that a strong and positive correlation in the investment in job training and firm size is a robust statistical finding both within and across countries with very different institutions and level of development. However, the findings do not support the view that this difference is mostly driven by market imperfections disproportionally affecting small and medium enterprise sector (SMEs). Rather, our evidence is supportive of SMEs having a smaller expected return from the investment in job training than larger firms. Therefore, the findings call for caution when designing pro-SME policies fostering the investment in on the job training.
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Bibliographic InfoPaper provided by The World Bank in its series Social Protection Discussion Papers with number 54967.
Date of creation: 01 May 2010
Date of revision:
Education For All; Labor Policies; Primary Education; Microfinance; Labor Markets;
Other versions of this item:
- Almeida, Rita K. & Aterido, Reyes, 2010. "The Investment in Job Training: Why Are SMEs Lagging So Much Behind?," IZA Discussion Papers 4981, Institute for the Study of Labor (IZA).
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-16 (All new papers)
- NEP-ENT-2010-10-16 (Entrepreneurship)
- NEP-HRM-2010-10-16 (Human Capital & Human Resource Management)
- NEP-LAB-2010-10-16 (Labour Economics)
- NEP-SBM-2010-10-16 (Small Business Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2009.
"Innovative firms or innovative owners ? determinants of innovation in micro, small, and medium enterprises,"
Policy Research Working Paper Series
4934, The World Bank.
- de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2009. "Innovative Firms or Innovative Owners? Determinants of Innovation in Micro, Small, and Medium Enterprises," IZA Discussion Papers 3962, Institute for the Study of Labor (IZA).
- Van Biesebroeck, Johannes, 2005. "Firm Size Matters: Growth and Productivity Growth in African Manufacturing," Economic Development and Cultural Change, University of Chicago Press, vol. 53(3), pages 545-83, April.
- Ibarrarán, Pablo & Maffioli, Alessandro & Stucchi, Rodolfo, 2009. "SME Policy and Firms’ Productivity in Latin America," IZA Discussion Papers 4486, Institute for the Study of Labor (IZA).
- Sampson, Thomas, 2013. "Brain drain or brain gain? Technology diffusion and learning on-the-job," Journal of International Economics, Elsevier, vol. 90(1), pages 162-176.
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