Does Training Generally Work? The Returns to In-Company Training

TLDR

The study estimates the returns of in‑company training by distinguishing between general and specific training. The authors analyze a firm‑level dataset that separates general and specific training to compare their effects on productivity growth. General training raises productivity growth, while specific training has no effect; the positive impact of general training persists after controlling for organizational and firm characteristics and increases with capital investment.

Abstract

This paper applies the familiar theoretical distinction between general and specific training to the empirical task of estimating the returns to in-company training. Using a firm-level dataset which distinguishes between general and specific training, we test for the relative effects of the two types of training on productivity growth. We find that although general training has a statistically positive effect on productivity growth, no such effect is observable for specific training. This positive effect of general training remains when we control for factors such as changes in work organization and corporate re-structuring, firm size and the initial level of human capital in the enterprise. Moreover, the impact of general training varies positively with the level of capital investment.