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The human capital of firms and the formal training of workers

Author

Listed:
  • Islam Asif M.
  • Gatti Roberta

    (World Bank, Washington, DC United States)

Abstract

The benefits of formal training are numerous, and yet in many regions few firms utilize them. In this study, we build on the literature by exploring how two forms of human capital–the quality of management practices and the proportion of university educated employees - influence the adoption of formal training. Using both cross-sectional and panel firm-level data for 29 economies in Eastern Europe and Central Asia (ECA) and 6 Middle East and North Africa (MENA) economies, management practices of the firm are found to be positively correlated with the implementation of formal training in ECA but not in MENA. The proportion of university educated workers is positively correlated with formal training in both ECA and MENA, but the finding is more robust for the latter. The study explores potential explanations why management practices have no influence on formal training in MENA and related policy implications.

Suggested Citation

  • Islam Asif M. & Gatti Roberta, 2023. "The human capital of firms and the formal training of workers," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 14(1), pages 1-39, January.
    • Handle: RePEc:vrs:izajdm:v:14:y:2023:i:1:p:39:n:1
    DOI: 10.2478/izajodm-2023-0004
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    References listed on IDEAS

    as
    1. Daron Acemoglu & Jörn-Steffen Pischke, 1998. "Why Do Firms Train? Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 79-119.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Training; Firm-level data; Human Capital; Management Practices; D22; J24; O15;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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