Determinants and Effects of Worker-Initiated Training: Learning about Required Job Skills at the Workplace

There are two main channels for a worker to accumulate human capital; firm-provided training and worker-initiated training (jiko-keihatu). This study focuses on worker-initiated training---a learning activity to improve one's job skills outside of work hours at one's own expense---and examines the motivation underpinning it and its effects on wage growth, skill development, and job opportunities using a unique survey of Japanese workers. While the results indicate that there is no statistically significant immediate increase in wages from worker-initiated training, thus perhaps causing workers to be hesitant to engage in it, it is also shown that worker-initiated training improves job skills and enhances job opportunities, which suggests that it could lead to a wage increase in the future. In addition, those who receive guidance from their supervisors about required skills at the workplace, and thus some insight into desirable work-related skills, are more likely to engage in worker-initiated training than those who have not received such guidance. Moreover, those who within the past three years participated in firm-provided training, the other opportunity for a worker to learn about required skills at the workplace, are also more likely to participate in worker-initiated training. These results suggest that the introduction of a system to better inform workers about required job skills and the possible long-term effects of worker-initiated training could be effective in promoting it.