Human Capital Spillovers and Economic Performance in the Workplace in 2004: Some British Evidence

This paper considers the impact of education and training on both individual and co-worker pay and establishment performance using the matched employer-employee data in WERS 2004, the panel dataset 1998-2004 and the new Financial Performance Questionnaire. This enables us to assess the impact of workplace education and training using both subjective (managers’ assessments) and objective data on productivity, profits and establishment survival. We establish that workplace education and training can have positive impacts on establishment financial performance, survival and growth. In contrast to extant studies, it was found that the square and the interaction between own and co-workers years of training also have a positive and significant impact on hourly pay. We find evidence indicating that establishments with 60% or more of workers trained have a higher establishment performance and also have a powerful impact on the likelihood of establishment survival.