Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/63830 
Year of Publication: 
2007
Series/Report no.: 
ETLA Discussion Papers No. 1105
Publisher: 
The Research Institute of the Finnish Economy (ETLA), Helsinki
Abstract: 
We study how upgrading the skills of the personnel affects a firm’s performance. Two different strategies are examined: 1) providing formal training and 2) strategic recruitment and separation policy. The use of register-based longitudinal employeremployee data supplemented with a survey on vocational training provides an opportunity to shed fresh light on the issue and allows us to address the usual econometric problems. We find that internally (but not externally) organized training stimulates subsequent growth of performance but only when combined with the implementation of new process or product technology. Hiring highly skilled workers is initially costly to firms but is productivityenhancing in the long run.
Subjects: 
Productivity, profitability, training, education, hiring
JEL: 
J24
M5
O3
D2
Document Type: 
Working Paper

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