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Firm Training and Labour Demand in Belgium: Do Productivity Dominate Cost Effects?

  • Benoît Mahy
  • Mélanie Volral

This paper models and estimates the impact of quantitative and qualitative training financed by the firm on labour demand in Belgium. It assumes profit maximising firms producing under a short run monopolistic competition regime, where training can increase labour demand through its positive net effect on labour productivity or decrease it through higher direct labour costs and wages. The estimation of our model on a panel of 17,812 firms over the period 1999-2007 allowing to control for the potential simultaneity between training and labour demand and for unobserved workplace characteristics reveals a small positive impact of training variables on labour demand. This suggests that productivity effects dominate cost effects.

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File URL: https://dipot.ulb.ac.be/dspace/bitstream/2013/59297/3/10-08Mahy_Volral_Training%20and%20Labour%20Demand.pdf
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Paper provided by ULB -- Universite Libre de Bruxelles in its series DULBEA Working Papers with number 10-08.

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Length: 35 p.
Date of creation: 22 Jun 2010
Date of revision:
Publication status: Published by:
Handle: RePEc:dul:wpaper:2013/59297
Contact details of provider: Web page: http://difusion.ulb.ac.be

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  1. Lorraine Dearden & Howard Reed & John Van Reenen, 2006. "The Impact of Training on Productivity and Wages: Evidence from British Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 397-421, 08.
  2. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute for the Study of Labor (IZA).
  3. Leuven, Edwin & Oosterbeek, Hessel, 2002. "A New Approach to Estimate the Wage Returns to Work-Related Training," IZA Discussion Papers 526, Institute for the Study of Labor (IZA).
  4. Anja Kuckulenz & Thomas Zwick, 2003. "The Impact of Training on Earnings : differences between Participant Groups and Training Forms," Working Papers of the Research Group Heterogenous Labor 03-06, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
  5. Ballot, Gerard & Fakhfakh, Fathi & Taymaz, Erol, 2001. "Firms' human capital, R&D and performance: a study on French and Swedish firms," Labour Economics, Elsevier, vol. 8(4), pages 443-462, September.
  6. Barrett, Alan, 1998. "Does Training Generally Work? The Returns to In-Company Training," CEPR Discussion Papers 1879, C.E.P.R. Discussion Papers.
  7. Katz, Eliakim & Ziderman, Adrian, 1990. "Investment in General Training: The Role of Information and Labour Mobility," Economic Journal, Royal Economic Society, vol. 100(403), pages 1147-58, December.
  8. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
  9. Daron Acemoglu & Jorn-Steffen Pischke, 1998. "Beyond Becker: Training in Imperfect Labor Markets," NBER Working Papers 6740, National Bureau of Economic Research, Inc.
  10. Arulampalam, Wiji & Booth, Alison L, 2001. "Learning and Earning: Do Multiple Training Events Pay? A Decade of Evidence from a Cohort of Young British Men," Economica, London School of Economics and Political Science, vol. 68(271), pages 379-400, August.
  11. Maarten Goos & Jozef Konings, 2001. "Does Rent-Sharing Exist in Belgium ?. An Empirical Analysis Using Firm Level Data," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(1), pages 65-79.
  12. Davidson, Russell & MacKinnon, James G., 1989. "Testing for Consistency using Artificial Regressions," Econometric Theory, Cambridge University Press, vol. 5(03), pages 363-384, December.
  13. Wulfsberg, F., 1996. "Adjustment Costs and Dynamic Labour demand in Norwegian Manufacturing Firms," Memorandum 23/1996, Oslo University, Department of Economics.
  14. Booth, Alison L, 1993. "Private Sector Training and Graduate Earnings," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 164-70, February.
  15. Conti, Gabriella, 2005. "Training, productivity and wages in Italy," Labour Economics, Elsevier, vol. 12(4), pages 557-576, August.
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