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Title:The return to the firm investment in human capital PDF Logo
Authors:Almeida, Rita K.
Carneiro, Pedro
Issue Date:2006
Series/Report no.:IZA Discussion Papers 1937
Abstract:In this paper we estimate the rate of return to firm investments in human capital in the form of formal job training. We use a panel of large firms with unusually detailed information on the duration of training, the direct costs of training, and several firm characteristics such as their output, workforce characteristics and capital stock. Our estimates of the return to training vary substantially across firms. On average it is -7% for firms not providing training and 24% for those providing training. Formal job training is a good investment for many firms and the economy, possibly yielding higher returns than either investments in physical capital or investments in schooling. In spite of this, observed amounts of formal training are very small.
Subjects:on-the-job training
panel data
production function
rate of return
JEL:C23
D24
J31
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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