Firm-provided Training Research Articles

Does Apprenticeship Improve Job Opportunities? A Regression Discontinuity Approach

In Italy the reforms of the last twenty years shaped a dual labour market with different levels of employment protection for permanent jobs, on one side, and temporary jobs like apprenticeships and fixed-term contracts, on the other side. The main difference between apprentices and other types of temporary workers is that the former should receive firm-provided training. The firm incentive in hiring apprentices consists in the possibility to pay lower wages and in a reduction in labour taxes.Using an Italian administrative longitudinal dataset containing information on all the job contracts started between January 2009 and June 2012, we estimate hazard functions towards permanent jobs and contrast the ones of apprentices with those of other types of temporary workers. The hazard function estimates based on a regression discontinuity approach affirm that apprenticeships are sorts of long entrance halls towards open-ended contracts, especially within the same firm where the apprenticeship was performed.

Retaining through training even for older workers

This paper investigates whether on-the-job training has an effect on the employability of workers. Using data from the Netherlands we disentangle the true effect of training incidence from the spurious one determined by unobserved individual heterogeneity. We also take into account that there might be feedback from shocks in the employment status to future propensity of receiving firm-provided training. We find that firm-provided training significantly increases future employment prospects. This also holds for older workers, suggesting that firm-provided training may be an important instrument to retain older workers at work.

Worker Productivity and Wages: Evidence from Linked Employer-Employee Data

This study compares the determinants of productivity and wages at both firm and worker level. In the firm-level analysis, we follow Hellerstein, Neumark and Troske (1999) and provide improved estimates based on an extended set of covariates including the intensity of firm-provided training. In the worker-level analysis we take a new turn and generate a proxy for unobserved worker productivity. Our results point to the presence of sizeable spillover effects from schooling and training as their impact is bigger on firm-level productivity equations than on the corresponding worker-level equations. In turn, our fully disaggregated model at worker level shows that, by using all possible combinations of worker attributes, we obtain that the wage differences across different worker groups are mostly productivity based and that the gap can be as high as 33%.

Hiring Costs of Skilled Workers and the Supply of Firm-Provided Training

This paper analyzes how the costs of hiring skilled workers from the external labor market affect a firm's supply of training. Using administrative survey data with detailed information on hiring and training costs for Swiss firms, we find evidence for substantial and increasing marginal hiring costs. However, firms can invest in internal training of unskilled workers and thereby avoid costs for external hiring. Controlling for a firm's training investment, we find that a one standard deviation increase in average external hiring costs increases the number of internal training positions by 0.7 standard deviations.

Institutions and training inequality

We analyze how firm-provided training is affected by the interaction among important institutional variables in the labor market: firing costs, minimum wages and unemployment benefits. We find that the degree of complementarity and substitutability among these variables depends on employees' abilities. Thereby the institutional interactions influence skill inequality. We derive how the influence of one of the institutional variables above is affected by other institutional variables with respect to inequality in skills arising from firm-provided training. We derive several striking results, such as: (a) the minimum wage and unemployment benefits generate increasing skill inequality whereas firing costs generate skill equalization; (b) unemployment benefits and firing costs are complements in their effects on skill inequality, (c) firing costs and the minimum wage are substitutes in their effects on skill equalization, and (d) unemployment benefits and the minimum wage are substitutes in their effects on skill inequality.

Retaining Through Training; Even for Older Workers

This paper investigates whether on-the-job training has an effect on the employability of workers. Using data from the Netherlands we disentangle the true effect of training incidence from the spurious one determined by unobserved individual heterogeneity. We also take into account that there might be feedback from shocks in the employment status to future propensity of receiving firm-provided training. We find that firm-provided training significantly increases future employment prospects. This finding is robust to a number of robustness checks. It also holds for older workers, suggesting that firm-provided training may be an important instrument to retain older workers at work.

Retaining Through Training: Even for Older Workers

This paper investigates whether on-the-job training has an effect on the employability of workers. Using data from the Netherlands we disentangle the true effect of training incidence from the spurious one determined by unobserved individual heterogeneity. We also take into account that there might be feedback from shocks in the employment status to future propensity of receiving firm-provided training. We find that firm-provided training significantly increases future employment prospects. This finding is robust to a number of robustness checks. It also holds for older workers, suggesting that firm-provided training may be an important instrument to retain older workers at work.

Disentangling Factors behind Training Participation in Italy

This paper analyses the pattern of training participation in Italy. Employing a new survey conducted on a large sample of individuals, we develop a model of bilateral training choices. In order to distinguish between workers and employers choices, we estimate a structural bivariate probit model whose identification relies on some mild assumptions on sample selection. With this approach we attempt to overcome the informative limitations of training participation probability estimates referred to reduced form models. The training participation probability depends on individual, job-specific and firm’s characteristics. Among the most relevant results, we find that females demand as much training as males and suffer from poorer chances of firm-provided training. Similarly, employees with a temporary contract are rationed even if their demand is in line with that of their permanent colleagues. Conversely, the lower participation of parttimers is explained by lower demand. A stance for more targeted training public policies is derived.

Le rendement apparent de la formation continue dans les entreprises : effets sur la productivité et les salaires

We estimate the productivity returns and wage returns to firm-provided training in a panel of French firms. The productivity returns are positive. For instance, an increase in training intensity of EUR150 per worker raises a firm’s labor productivity by 0,4 %. Moreover, firms benefit from providing training to their workers, since they keep most of the gain from training : the post-training wage increase is less than half of the productivity increase. However , our study measures only apparent returns. Although it tries to control short-run simultaneity biases, it does not separate the direct effects of training from the effects of factors that generally accompany or motivate training in the medium / long run, such as technological and organizational changes.

Firm-provided training and temporary contracts

This paper analyses the relationship between workers’ type of contract and the probability of receiving firm-provided training. In particular, we raise the following question: do workers with temporary contracts face the same probability of receiving training as workers with permanent contracts, once we account for the fact that both types of workers have different probabilities of being employed in a firm providing training? The results from our empirical analysis using data from the Spanish labour market suggest that workers with temporary contracts not only are less likely to be employed in training firms but, once they are in those firms, they also have a lower probability of being chosen to participate in firm-provided training activities.

Unions, Training, and Firm Performance: Evidence from the British Workplace Employee Relations Survey

This paper uses a combination of workplace and matched-employee workplace data from the British 1998 Workplace Employee Relations Survey to examine the impact of unions and firm-provided training (incidence, intensity/coverage, and duration) on establishment performance. The performance effects of training are indexed not just by individual and median establishment earnings but also by subjective measures of plant labor productivity and financial performance. Union effects on training are fairly subtle, and somewhat more positive when using individual rather than plant-wide training data. A positive impact of training on earnings is also detected in both individual and plant-based wage data, although consistent with much recent research the effects of union recognition are at best muted. There are also some signs of a positive interaction term for unionism and training in the earnings equations, but by the same token negative effects are encountered when training duration is expressed in categorical terms and interacted with union recognition. Instrumenting training yielded positive results for labor productivity and the firm’s bottom line. While some negative effects of multiple unionism at the workplace now emerge, they seemingly do not operate through the training route.

The Impact of Firm-Provided Training on Production

The returns to firm-provided training are established, taking account of three possible firm-size effects: the HRM (Human Resource Management) effect, employee selection effect and scale effect. Using panel data on 173 Dutch firms, support is found for the existence of the HRM effect: training support per working day (the average time a firm spends on setting up and coordinating a training programme) has a positive influence on the benefits of training. Small firms provide, on average, less training support per working day than their larger counterparts. In combination with the HRM effect, this implies that small firms benefit less from firm-provided training.

Firm-Specific Training: Consequences for Job Mobility

This paper analyzes the impact of formal training on worker mobility. Using data from the Swiss Labor Force Survey, we find that on-the-job search activities and, to a smaller extent, actual job separations are significantly affected by both employer-provided and general training. Moreover, while the separation probability of searching workers is strongly affected by previous firm-provided training, no such effect shows up for non-searchers. This is consistent with the hypothesis that workers bear most of the cost of specific training.

Returns to firm-provided training: evidence from French worker–firm matched data

Using worker–firm matched data, we study the incidence and the effects of firm-provided training in France. When we use the same kinds of data and models as the existing ones, the estimated impact of training on wages is as high in France as in other countries. When we build on the uniqueness of our French data and control for the selectivity of firms' training practices, the estimated impact of training falls close to zero. The wage differentials observed across trained and untrained workers reflect that individuals who are the most likely to be placed in training programs are also those with the highest unmeasured abilities.

Occupational Training, Unions, and Internal Labor Markets

A large majority of U.S. establishments provide formal job training programs, according to the 1991 National Organizations Survey. Most training is directed at core employees (who produce the company's main product or service) and their managers. But contrary to previous research, blue-collar core occupations receive as much company training as white-collar core workers. The more extensive an organization's internal labor market, the more likely it is to use formal training programs as mechanisms for enabling workers to advance to positions of higher prestige, pay, and responsibility. The presence of a labor union representing core workers in wage negotiations not only is associated with greater firm-provided training effort, but unions also seem to offset the adverse effects of an absent or poorly developed internal labor market for all types of workers. Unionized establishments are more likely than nonunionized workplaces to provide training to core workers recruited from outside the organization.

The Other Half of the Picture: Antecedents of Spouse Cross-Cultural Adjustment

Scholars have argued that the adjustment of the expatriate's spouse is an important factor in the success or failure of expatriates in overseas assignments; however, they have not empirically examined which factors are related to spouse adjustment. This study is the first to systematically examine the antecedents of spouse cross-cultural adjustment to interacting with host country nationals and to coping with the general, foreign environment. The results indicate that firms seeking the spouse's opinion about the international assignment, the spouse's self-initiated predeparture training, and social support from family and host country nationals during the overseas assignment have a positive relationship with spouse interaction adjustment. Additionally, firms' seeking the spouse's opinion about the international assignment and standard of living have a positive relationship with spouse general adjustment, while firm-provided training and culture novelty have negative relationships with spouse general adjustment. Several important research and practical implications are explored.