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

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  • Benoît Mahy
  • Mélanie Volral

Abstract

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.

Suggested Citation

  • Benoît Mahy & Mélanie Volral, 2010. "Firm Training and Labour Demand in Belgium: Do Productivity Dominate Cost Effects?," DULBEA Working Papers 10-08, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:dul:wpaper:2013/59297
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    References listed on IDEAS

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    6. 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, August.
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    More about this item

    Keywords

    Training; Labour Demand; Labour Productivity; Wage Determination;
    All these keywords.

    JEL classification:

    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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