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Time - Even More Costly Than Money: Training Costs of Workers and Firms

Author

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  • Simone Tuor

    () (Institute for Strategy and Business Economics, University of Zurich)

  • Uschi Backes-Gellner

    () (Institute for Strategy and Business Economics, University of Zurich)

Abstract

We empirically investigate the joint training decisions of workers and firms. The aim of our study is to learn how various cost components affect workers’ (non-)participation in training. In particular, we separately consider monetary and non-monetary training costs, which is possible thanks to an especially rich dataset that includes both participants and non-participants. Our estimation results show that workers whose firms cover some of their training costs would generally be more likely to have assumed the full training costs themselves had they not received employer support. Moreover, the share of self-financed training, as compared to employer-supported training, is generally low. Thus, firms moderate virtually all training decisions and, as a result, considerably influence (non-)participation patterns. Interestingly, although training non-participation can be attributed to both monetary and non-monetary costs, the latter seem to comprise the more binding restriction. That is, time is more costly than money.

Suggested Citation

  • Simone Tuor & Uschi Backes-Gellner, 2009. "Time - Even More Costly Than Money: Training Costs of Workers and Firms," Economics of Education Working Paper Series 0046, University of Zurich, Department of Business Administration (IBW).
  • Handle: RePEc:iso:educat:0046
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    File URL: http://repec.business.uzh.ch/RePEc/iso/leadinghouse/0046_lhwpaper.pdf
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    References listed on IDEAS

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    1. Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2004. "Training in Europe," Journal of the European Economic Association, MIT Press, pages 346-360.
    2. Booth, Alison L, 1991. "Job-Related Formal Training: Who Receives It and What Is It Worth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 53(3), pages 281-294, August.
    3. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 1-9.
    4. Uschi Backes-Gellner & Simone N. Tuor, 2010. "Avoiding Labor Shortages by Employer Signaling: On the Importance of Good Work Climate and Labor Relations," ILR Review, Cornell University, ILR School, pages 271-286.
    5. Greenhalgh, Christine & Mavrotas, George, 1994. "The Role of Career Aspirations and Financial Constraints in Individual Access to Vocational Training," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 579-604, October.
    6. Jörn-Steffen Pischke, 2001. "Continuous training in Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(3), pages 523-548.
    7. Acemoglu, Daron & Pischke, Jorn-Steffen, 1999. "Beyond Becker: Training in Imperfect Labour Markets," Economic Journal, Royal Economic Society, vol. 109(453), pages 112-142, February.
    8. Wim Groot, 1999. "Productivity effects of enterprise-related training," Applied Economics Letters, Taylor & Francis Journals, vol. 6(6), pages 369-371.
    9. Alison L. Booth & Gylfi Zoega, 2004. "Is wage compression a necessary condition for firm-financed general training?," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 88-97, January.
    10. Hashimoto, Masanori, 1981. "Firm-Specific Human Capital as a Shared Investment," American Economic Review, American Economic Association, vol. 71(3), pages 475-482, June.
    11. Simon Janßen & Uschi Backes-Gellner, 2009. "Skill Obsolescence, Vintage Effects and Changing Tasks," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 55(1), pages 83-103.
    12. Edward P. Lazear, 2003. "Firm-Specific Human Capital: A Skill-Weights Approach," NBER Working Papers 9679, National Bureau of Economic Research, Inc.
    13. Rosen, Sherwin, 1976. "A Theory of Life Earnings," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 45-67, August.
    14. Tamás Bartus, 2005. "Estimation of marginal effects using margeff," Stata Journal, StataCorp LP, vol. 5(3), pages 309-329, September.
    15. 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).
    16. 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.
    17. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
    18. Oosterbeek, Hessel, 1998. "Unravelling Supply and Demand Factors in Work-Related Training," Oxford Economic Papers, Oxford University Press, vol. 50(2), pages 266-283, April.
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    Cited by:

    1. Görlitz, Katja & Rzepka, Sylvi, 2014. "Does regional training supply determine employees' training participation?," Discussion Papers 2014/9, Free University Berlin, School of Business & Economics.
    2. Burgard, Claudia, 2012. "Gender Differences in Further Training Participation – The Role of Individuals, Households and Firms," Ruhr Economic Papers 320, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. repec:zbw:rwirep:0320 is not listed on IDEAS
    4. repec:spr:anresc:v:59:y:2017:i:1:d:10.1007_s00168-017-0831-8 is not listed on IDEAS
    5. Claudia Burgard, 2012. "Gender Differences in Further Training Participation – The Role of Individuals, Households and Firms," Ruhr Economic Papers 0320, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

    More about this item

    Keywords

    Training costs; employer-supported training; time vs. money;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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