The Impact of Training on Productivity and Wages: Evidence from British Panel Data* (original) (raw)

Training and coprorate productivity: Evidence from a panel of UK industries

It is standard in the literature on training to use wages as a sufficient statistic for productivity. This paper examines the effects of work-related training on direct measures of productivity. Using a new panel of British industries 1983-96 and a variety of estimation techniques we find that work-related training is associated with significantly higher productivity. A 1% point increase in training is associated with an increase in value added per hour of about 0.6% and an increase in hourly wages of about 0.3%. We also show evidence using individual-level data sets that is suggestive of training externalities.

‘Who Gains When Workers Train? Training and Productivity in a Panel of British Industries’

There is a vast empirical literature of the effects of training on wages that are taken as an indirect measure of productivity. This paper is part of a smaller literature on the effects of training on direct measures of industrial productivity. We analyse a panel of British industries between 1983 and 1996. Training information (and other individual productivity indicators such as education and experience) is derived from a question that has been asked consistently over time in the Labour Force Survey. This is combined with complementary industry-level data sources on value added, wages, labour and capital. We use a variety of panel data techniques (including system GMM) to argue that training significantly boosts productivity. The existing literature has underestimated the full effects of training for two reasons. First, it has tended to treat training as exogenous whereas in reality firms may choose to re-allocate workers to training when demand (and therefore productivity) is low. Secondly, our estimates of the effects of training on wages are about half the size of the effects on industrial productivity. It is misleading to ignore the pay-off firms take in higher profits from training. The effects are economically large. For example, raising the proportion of workers trained in an industry by 5 percentage points (say from the average of 10% to 15%) is associated with a 4 per cent increase in value added per worker and a 1.6 per cent increase in wages.

Who gains when workers train? Training and corporate productivity in a panel of British industries

2000

The Impact of Training on Productivity and Wages: Firm Level Evidence

SSRN Electronic Journal, 2009

This paper uses …rm level panel data of …rm provided training to estimate its impact on productivity and wages. To this end the strategy proposed by Ackerberg, Caves and Frazer (2006) for estimating production functions to control for the endogeneity of input factors and training is applied. The productivity premium for a trained worker is estimated at 23%, while the wage premium of training is estimated at 12%. Our results give support to recent theories that explain work related training by imperfect competition in the labor market.

The Impact of Training on Productivity: Evidence from a Large Panel of Firms ⁄

RePEc: Research Papers in Economics, 2008

This paper investigates the effects of training on labor productivity using a unique nationally representative panel of Italian firms for the period 2002 to 2005. We find that training has a positive and significant effect on productivity. Using a variety of panel estimation techniques, we show that failing to account for unobserved heterogeneity leads to overestimate the impact of training on productivity, while failing to account for endogeneity leads to substantially underestimate it. Training also has a positive and significant impact on wages, but this effect is about half the size of the effect on productivity. Within occupational groups, the effect of training on productivity is large and significant for blue-collars, but small and not significant for white collars.

Training, education and productivity

2009

This paper investigates the impact of training and education on productivity, in particular linking to a literature that emphasizes the need to reorganise production following adoption of ICT. The paper examines training at the total economy level and variation across industries, focusing especially on manufacturing versus market service sectors. It also examines the characteristics of those who receive training and outlines the incentives that underlie this.

The impact of training on productivity: evidence from a panel of Italian firms

International Journal of Manpower, 2014

This paper investigates the effects of training on labour productivity using a unique nationally representative panel of Italian firms for the period 2002 to 2005. We find that training has a positive and significant effect on productivity. Using a variety of panel estimation techniques, we show that failing to account for unobserved heterogeneity leads to overestimate the impact of training on productivity, while failing to account for endogeneity leads to substantially underestimate it. Training also has a positive and significant impact on wages, but the effect is about half the size of the effect on productivity. Within occupational groups, the effect of training on productivity is large and significant for blue-collars, but small and not significant for white collars.

Impact of Training on Firms’ Output and Labour Productivity

Impact of Training on Firms' Output and Labour Productivity 1

Training is an important, core component of human resource development and is emphasized in the Malaysian economic development process. The commitment of the government towards the aspect of training can be seen from a huge expenditure allocation on training and it is given almost the same importance as education. Conscious of this importance, the Malaysian Government established the Human Resource Development Fund (HRDF) managed by the Human Resource Development Limited (HRDL). The HRDL Act has stipulated that each company must contribute 1% of total wages of an individual employee to HRDF. Employers can then use this contribution to train their employees under several HRDF training schemes. This paper aims to analysis the impact of workers' training on firms' output and labour productivity. The analysis is based on the companies' data in the hotel sector; and information and communication technology (ICT) sectors collected in 2009 in Klang Valley and Penang, Malaysia. ...

Training and Firm Productivity – Panel Evidence for Germany

This paper presents for the first time panel evidence on the productivity effects of training in Germany. It uses a large and representative establishment panel data set for all profit oriented sectors of the economy. Increasing the share of employees participating at training in the first half of a year has a positive and significant effect on firm productivity in the same and the next year. The impact in the third year is positive but insignificant. While formal internal and external training courses increase productivity in the same year and the years after, their impact decreases over time. The positive productivity impact of quality circles increases over time, instead, while training on the job has a persistent negative productictivity effect. When we control for selectivity and unobserved heterogeneity, the measured productivity effects further increase, suggesting that firms with an inefficient production structure deliberately use training in order to boost productivity. In...

The Impact of Training on Productivity and Wages: Evidence from British Panel Data* (original) (raw)

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