Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/35786 
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers No. 4042
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
So far the literature has found that the effect of macroeconomic fluctuations on training decisions is ambiguous. On the one hand, the opportunity cost to train is lower during downturns, and thus training should be counter-cyclical. On the other hand, a positive shock may be related to the adoption of new technologies and increased returns to skill, making training incidence pro-cyclical. Using the Canadian panel of Workplace and Employee Survey (WES) we find that (i) training moves counter-cyclical with the aggregate business cycle (more training during downturns), while at the same time (ii) the idiosyncratic sectoral shocks have a positive impact on training incidence (more training in sectors doing relatively better). This finding helps us understand training decisions by firms and has important theoretical and policy implications.
Subjects: 
Training
business cycles
JEL: 
E32
J24
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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