 Evaluating firm training, effects on performance and labour demandEugenia Kazamaki Ottersten and Thomas Lindh Applied Economics Letters, 1999, vol. 6, issue 7, 431-437 Abstract: A quality-adjusted measure of labour is developed, where labour efficiency depends on firm training. This specification is integrated into a flexible neoclassical cost function, representing the firm's production technology. Unlike traditional production functions, the cost function does not constrain all inputs to be substitutes and it allows capital to be fixed in the short run. These features are found to be important in the evaluation of the indirect effects of training. Short-run indirect effects arise through the relative price mechanism; an increase in labour efficiency decreases the quality-adjusted price of labour. Long-run indirect effects stem from the equilibrium adjustment of the quasi-fixed capital stock. The methodology is illustrated by means of a small firm panel data set. The results show that previous analyses have been overly restrictive in assuming all inputs to be substitutes. E.g., labour and capital are found to be long-run complements, implying that training increases long run labour demand, although the short-run effect is negative. The training outcomes are imprecisely estimated, but indicate that cost savings and productivity gains can be substantial. Date: 1999 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:6:y:1999:i:7:p:431-437 Ordering information: This journal article can be ordered from Access Statistics for this article Applied Economics Letters is currently edited by Anita Phillips More articles in Applied Economics Letters from Taylor & Francis Journals |
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