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On-The-Job Training and Learning: Formal Training versus Learning by Doing

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  • Kevin Siqueira

    (University of Texas at Dallas)

Abstract

The paper looks at and compares two methods of on-the-job training: formal training and learning by doing. The former involves an intensive training period prior to the employee directly taking on the position for which he or she was hired for, while the latter, the employee begins immediately and is expected to learn on his or her own through experience over time. The former method allows less room for shirking but involves a period of investment in the form of the value of output or service that is effectively foregone as a result of the more resource-intensive training regime. Perhaps surprisingly, even if the formal training program does not significantly improve upon the probability of future success in production or service provision, formal training can provide higher net benefits to the training firm than learning by doing because the savings from the reduction in shirking can be greater than the cost of foregone output.

Suggested Citation

  • Kevin Siqueira, 2023. "On-The-Job Training and Learning: Formal Training versus Learning by Doing," Journal of Labor Research, Springer, vol. 44(3), pages 181-198, December.
  • Handle: RePEc:spr:jlabre:v:44:y:2023:i:3:d:10.1007_s12122-023-09350-9
    DOI: 10.1007/s12122-023-09350-9
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Moral hazard; Limited liability; Formal training; Learning by doing;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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