Job training and firm efficiency: evidence from a meta-frontier analysis

Abstract

ABSTRACT This study analyzes the effect of vocational training on technology efficiency (TE) using Workplace Panel Survey data from South Korea. We apply both stochastic frontier analysis (SFA) and meta-frontier analysis (MFA) to compare the TEs of firms with vocational training against the counterpart without vocational training. Our findings from the SFA, which assumes a homogeneous level of technology across comparison groups, confirm that firms without vocational training are more efficient. MFA, which is used to compare the relative efficiencies of different skill levels, provides more intuitive estimation results. Namely, companies that conduct vocational training are closer to the meta-frontier – higher efficiency – than those that do not.