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Employee Training and Firm Performance:Quasi-experimental evidence from the European Social Fund

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  • Pedro Martins

Abstract

As work changes, firm-provided training may become more relevant for good economic and social outcomes. However, so far there is little or no causal evidence about the effects of training on firms. This paper studies a large training grants programme in Portugal, contrasting successful firms that received the grants and unsuccessful firms that did not. Combining several rich data sets, we compare a large number of potential outcomes of these firms, while following them over long periods of time before and after the grant decision. Our difference-in-differences models estimate significant positive effects on take up (training hours and expenditure), with limited deadweight; and that such additional training led to increased sales, value added, employment, productivity, and exports. These effects tend to be of at least 5% and, in some cases, 10% or more.

Suggested Citation

  • Pedro Martins, 2020. "Employee Training and Firm Performance:Quasi-experimental evidence from the European Social Fund," CVER Research Papers 027, Centre for Vocational Education Research.
    • Handle: RePEc:cep:cverdp:027
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    Cited by:

    1. Martins, Pedro S., 2020. "What Do Employers' Associations Do?," IZA Discussion Papers 13705, Institute of Labor Economics (IZA).
    2. Brunello, Giorgio & Gereben, Áron & Weiss, Christoph T. & Wruuck, Patricia, 2020. "Financing Constraints and Employers' Investment in Training," IZA Discussion Papers 13067, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Training subsidies; Productivity; Counterfactual evaluation;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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