The Impact of Training on Productivity in Canadian Firms: Estimating Distributed Lags from the WES 1999-2005

By Amélie Bernier and Jean-Michel Cousineau.

Published by The Social Sciences Collection

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Article: Electronic $US5.00

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

International Journal of Interdisciplinary Social Sciences, Volume 5, Issue 7, pp.231-240. Article: Print (Spiral Bound). Article: Electronic (PDF File; 661.853KB).

Amélie Bernier

Assitant Professor, Work, Economy and Management teaching and research unit Télé-université, Téluq-Université du Québec à Montréal, Montreal, Québec, Canada

The results presented in this article are the fruit of chapter 1 of my Ph.D. dissertation submitted to the Université de Montréal in June 2010. Amélie Bernier, Ph.D., Assistant professor, Labor Relations, Téluq-Université du Québec à Montréal, Québec, Canada.

Professor Jean-Michel Cousineau

Professor, de relations industrielles, Université de Montréal, Montreal, Quebec, Canada

Jean-Michel Cousineau, Professor, Labor Economic and Labor Relations, École de relations industrielles, Université de Montréal, Québec, Canada.

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