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Who benefits from firm-sponsored training?

Author

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  • Benoit Dostie

    (HEC Montréal, Canada, and IZA, Germany)

Abstract

Workers participating in firm-sponsored training receive higher wages as a result. But given that firms pay the majority of costs for training, shouldn’t they also benefit? Empirical evidence shows that this is in fact the case. Firm-sponsored training leads to higher productivity levels and increased innovation, both of which benefit the firm. Training can also be complementary to, and enhance, other types of firm investment, particularly in physical capital, such as information and communication technology (ICT), and in organizational capital, such as the implementation of high-performance workplace practices.

Suggested Citation

  • Benoit Dostie, 2020. "Who benefits from firm-sponsored training?," IZA World of Labor, Institute of Labor Economics (IZA), pages 145-145, July.
    • Handle: RePEc:iza:izawol:journl:2020:n:145
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    References listed on IDEAS

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    1. Carla Haelermans & Lex Borghans, 2012. "Wage Effects of On-the-Job Training: A Meta-Analysis," British Journal of Industrial Relations, London School of Economics, vol. 50(3), pages 502-528, September.
    2. Loewenstein, Mark A & Spletzer, James R, 1998. "Dividing the Costs and Returns to General Training," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 142-171, January.
    3. Benoit Dostie, 2013. "Estimating the Returns to Firm-Sponsored On-the-Job and Classroom Training," Journal of Human Capital, University of Chicago Press, vol. 7(2), pages 161-189.
    4. Lorraine Dearden & Howard Reed & John Van Reenen, 2006. "The Impact of Training on Productivity and Wages: Evidence from British Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 397-421, August.
    5. Jozef Konings & Stijn Vanormelingen, 2015. "The Impact of Training on Productivity and Wages: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 485-497, May.
    6. Harley Frazis & Maury Gittleman & Mary Joyce, 2000. "Correlates of Training: An Analysis Using Both Employer and Employee Characteristics," ILR Review, Cornell University, ILR School, vol. 53(3), pages 443-462, April.
    7. Jacob Mincer, 1962. "On-the-Job Training: Costs, Returns, and Some Implications," NBER Chapters, in: Investment in Human Beings, pages 50-79, National Bureau of Economic Research, Inc.
    8. Almeida, Rita & Carneiro, Pedro, 2009. "The return to firm investments in human capital," Labour Economics, Elsevier, vol. 16(1), pages 97-106, January.
    9. Stefan Bauernschuster & Oliver Falck & Stephan Heblich, 2009. "Training and Innovation," Journal of Human Capital, University of Chicago Press, vol. 3(4), pages 323-353.
    10. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(1), pages 339-376.
    11. 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.
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    Cited by:

    1. David J. Cooper & Krista Saral & Marie Claire Villeval, 2021. "Why Join a Team?," Management Science, INFORMS, vol. 67(11), pages 6980-6997, November.
    2. Bossler, Mario & Gürtzgen, Nicole & Lochner, Benjamin & Betzl, Ute & Feist, Lisa & Wegmann, Jakob, 2018. "Auswirkungen des gesetzlichen Mindestlohns auf Betriebe und Unternehmen," IAB-Forschungsbericht 201804, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Olga Kupets, 2018. "Employer‐provided training, innovation and skills in post‐Soviet countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(4), pages 725-768, October.
    4. Lutz Bellmann & Mario Bossler & Hans-Dieter Gerner & Olaf Hübler, 2017. "Training and minimum wages: first evidence from the introduction of the minimum wage in Germany," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-22, December.
    5. Kupets, Olga, 2018. "Investment in human capital in post-Soviet countries: Why are firms not training more?," CEI Working Paper Series 2017-7, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.

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    More about this item

    Keywords

    firm-sponsored training; wages; productivity; innovation; complementarity; human capital;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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