This paper estimates the effects of training expenditures on productivity in Canada. The data used are taken from the Statistics Canada Workplace and Employee Survey (WES) for the 1999-2005 period. Among all of the works consulted dealing with the possible impact of training on productivity, more and more treat the longitudinal character of the data, but few consider the delayed effects of the training. Also, the results on this subject differ widely. The longitudinal nature of the WES allows us to address issues of the endogeneity of inputs including human capital and unobserved heterogeneity of establishments as well as omitted variable bias. The impact of training on productivity is measured by estimating a Cobb-Douglas production function within a distributed lag estimation framework. We exploit the advantages of the longitudinal data by estimating a model that considers the impact of training expenditures on productivity, by adding them to the investments in physical capital. The interaction between investments in training and physical capital makes it possible to test the assumption that investments in physical capital and human capital are complementary and mutually supportive. Our results show that investments in training have positive effects on productivity which are spread out over a three-year period.
|Keywords:||Returns on Training, Firm Productivity, Longitudinal Data|
Assitant Professor, Work, Economy and Management teaching and research unit Télé-université, Téluq-Université du Québec à Montréal, Montreal, Québec, Canada
Professor, de relations industrielles, Université de Montréal, Montreal, Quebec, Canada
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