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Employee Training and Firm Performance: Quasi-experimental evidence from the European Social Fund

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  • Pedro S. Martins

Abstract

As work changes, firm-provided training may become more relevant; however, there is little causal evidence about the effects of training on firms. This paper studies a large training grants programme in Portugal, contrasting successful firms that received the grants and unsuccessful firms that did not. Combining several rich data sets, we compare a large number of potential outcomes of these firms, while following them over long periods of time before and after the grant decision. Our difference-in-differences models estimate significant positive effects on take up (training hours and expenditure), with limited deadweight; and that such additional training led to increased sales, value added, employment, productivity, and exports. These effects tend to be of at least 5% and, in some cases, 10% or more, and are robust in multiple dimensions of the analysis.

Suggested Citation

  • Pedro S. Martins, 2020. "Employee Training and Firm Performance: Quasi-experimental evidence from the European Social Fund," GEE Papers 0152, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jun 2020.
    • Handle: RePEc:mde:wpaper:0152
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    File URL: https://www.gee.gov.pt//RePEc/WorkingPapers/GEE_PAPERS_152.pdf
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    References listed on IDEAS

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    Cited by:

    1. Brunello, Giorgio & Gereben, Áron & Weiss, Christoph & Wruuck, Patricia, 2020. "Financing constraints and employers' investment in training," EIB Working Papers 2020/05, European Investment Bank (EIB).
    2. Martins, Pedro S., 2020. "What Do Employers' Associations Do?," IZA Discussion Papers 13705, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Training subsidies; Productivity; Counterfactual evaluation.;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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