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The return to firm investments in human capital

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  • Almeida, Rita
  • Carneiro, Pedro

Abstract

In this paper we estimate the rate of return to firm investments in human capital in the form of formal job training. We use a panel of large firms with detailed information on the duration of training, the direct costs of training, and several firm characteristics. Our estimates of the return to training are substantial (8.6%) for those providing training. Results suggest that formal job training is a good investment for these firms possibly yielding comparable returns to either investments in physical capital or investments in schooling.

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  • Almeida, Rita & Carneiro, Pedro, 2009. "The return to firm investments in human capital," Labour Economics, Elsevier, vol. 16(1), pages 97-106, January.
  • Handle: RePEc:eee:labeco:v:16:y:2009:i:1:p:97-106
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    More about this item

    Keywords

    On-the-job training Panel data Production function Rate of return;

    JEL classification:

    • 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

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