On-the-job Training

Abstract

This chapter discusses on-the-job training programs organized during work. The term on-the-job training is used in several overlapping ways, all of which are usually focused on post school learning. Studies of schooling as an investment as they were conducted in earlier years and are often conducted today constitute only one element in human capital theory. The firm and the individual both have a stake in the accumulation of specific human capital, and the result spelled out in human capital theory is a sharing of the costs of and returns to the formation of such capabilities. The relative importance of firm-specific human capital depends in part on the size of an economy. Stability in attachments between firms and their employees and the formation of firm-specific human capital are mutually supportive features of labor markets, both external and internal but most obviously and directly of internal labor markets. Line of work runs counter to human capital theories. On-the-job training is of crucial importance not only for economic growth but also for the sustained viability of an economy in the modern world.