Does Training Generally Work? The Returns to In-Company Training

This paper applies the familiar theoretical distinction between general and specific training to the empirical task of estimating the returns to in-company training. Given the theoretical prediction that employees who receive general training are more likely to quit, the productivity effects of general training should be lower than those of specific training. Using a firm-level dataset which distinguishes between general and specific training, we test for the relative effects of the two types of training on productivity growth. We find, contrary to expectations, that although general training has a statistically positive effect on productivity growth, no such effect is observable for specific training. This positive effect of general training remains when we control for changes in work organization and corporate restructuring. Moreover, the impact of general training varies positively with the level of capital investment.