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The incentives to invest in job training : do strict labor codes influence this decision?

  • Almeida, Rita
  • Aterido, Reyes

This paper studies the link between labor market regulations and the incentives of firms to invest in the human capital of their employees. The author's explore a firm level data set across several developing countries and comparethe supply of formal training programs for firms exposed to different degrees of de facto labor regulations. The author's findings show that a more flexible labor code tends to be associated with a smaller investment in job training. However, this effect is small and heterogeneous. Reforms that simultaneously accelerate the diffusion of temporary contracts and increase the protection of permanent workers tend to generate negative effects on the firm's investment in human capital.

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File URL: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2009/12/14/000333038_20091214231835/Rendered/PDF/461890replacem1revious0record100832.pdf
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Paper provided by The World Bank in its series Social Protection Discussion Papers with number 46189.

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Date of creation: 01 Oct 2008
Date of revision:
Handle: RePEc:wbk:hdnspu:46189
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  1. Hong Tan & Lopez-Acevedo, Gladys, 2003. "Mexico : in-firm training for the knowledge economy," Policy Research Working Paper Series 2957, The World Bank.
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