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Mexico : in-firm training for the knowledge economy

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  • Hong Tan
  • Lopez-Acevedo, Gladys
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    Abstract

    The authors use panel firm-level data to study in-firm training in Mexican manufacturing in the 1990s, its determinants, and effects on productivity and wages. Over this decade, not only did the incidence of employer-provided training become more widespread among manufacturing enterprises, but a higher proportion of the workforce received training within firms. Technological change, as proxied by research and development (R&D), was an important driver of these training trends. It contributed to increased training over time through a rising share of firms doing R&D, but more important, through a greater propensity over time to train conditional on conducting R&D. The authors investigate the productivity and wage effects of training in several ways: 1) Estimating the wage and productivity effects of training treated as endogenous. 2) Using training event histories to examine the impact of changing training status over time. 3) Looking at how training (and technology) practices changed where firms were located in productivity and wage distributions over the 1990s. Together, these cross-sectional and panel analyses found evidence that training had large and statistically significant wage and productivity outcomes, that joint training and R&D yielded larger returns than investments in just one or the other, and that both training and technology investments enabled firms to improve their relative position in the wage and productivity distribution between 1993 and 1999.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2957.

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    Date of creation: 31 Jan 2003
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    Handle: RePEc:wbk:wbrwps:2957

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    Related research

    Keywords: Girls'Education; Labor Policies; ICT Policy and Strategies; Teaching and Learning; Curriculum&Instruction; Gender and Education; Teaching and Learning; Tertiary Education; ICT Policy and Strategies; Curriculum&Instruction;

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    References

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    1. Rosholm, Michael & Nielsen, Helena Skyt & Dabalen, Andrew, 2007. "Evaluation of training in African enterprises," Journal of Development Economics, Elsevier, vol. 84(1), pages 310-329, September.
    2. Foster, Andrew D & Rosenzweig, Mark R, 1996. "Technical Change and Human-Capital Returns and Investments: Evidence from the Green Revolution," American Economic Review, American Economic Association, vol. 86(4), pages 931-53, September.
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    5. Jacob Mincer, 1989. "Human Capital Responses to Technological Change in the Labor Market," NBER Working Papers 3207, National Bureau of Economic Research, Inc.
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    8. Bee Yan Aw & Sukkyun Chung & Mark J. Roberts, 2003. "Productivity, output, and failure: a comparison of taiwanese and korean manufacturers," Economic Journal, Royal Economic Society, vol. 113(491), pages F485-F510, November.
    9. Berman, E. & Bound, J. & Machin, S., 1997. "Implications of Skill-Biased Technological Change: International Evidence," Papers 25, Centre for Economic Performance & Institute of Economics.
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    11. Biggs, T. & Shah, M. & Srivastava, P., 1995. "Technological Capabilities and Learning in African Enterprises," Papers 288, World Bank - Technical Papers.
    12. Dearden, Lorraine & Reed, Howard & Van Reenen, John, 2000. "Who Gains when Workers Train? Training and Corporate Productivity in a Panel of British Industries," CEPR Discussion Papers 2486, C.E.P.R. Discussion Papers.
    13. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
    14. Nina Pavcnik, 2000. "What Explains Skill Upgrading in Less Developed Countries?," NBER Working Papers 7846, National Bureau of Economic Research, Inc.
    15. Black, Sandra E & Lynch, Lisa M, 1996. "Human-Capital Investments and Productivity," American Economic Review, American Economic Association, vol. 86(2), pages 263-67, May.
    16. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
    17. John L. Enos, 1962. "Invention and Innovation in the Petroleum Refining Industry," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 299-322 National Bureau of Economic Research, Inc.
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    Cited by:
    1. Maliranta, Mika & Asplund, Rita, 2007. "Training and Hiring Strategies to Improve Firm Performance," Discussion Papers 1105, The Research Institute of the Finnish Economy.
    2. Montes-Rojas, Gabriel & Santamaria, Mauricio, 2007. "Sources of productivity growth: Evidence from the Mexican manufacturing sector," The North American Journal of Economics and Finance, Elsevier, vol. 18(3), pages 263-278, December.
    3. Tan, Hong & Savchenko, Yevgeniya & Gimpelson, Vladimir & Kapeliushnikov, Rostislav & Lukiyanova, Anna, 2007. "Skills Shortages and Training in Russian Enterprises," IZA Discussion Papers 2751, Institute for the Study of Labor (IZA).

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