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Corporate Training and Skill Gaps: Did COVID-19 Stem EU Convergence in Training Investments?

Konstantinos Pouliakas and Patricia Wruuck
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Patricia Wruuck: European Investment Bank

No 15343, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: European firms have increasingly invested in training of employees but differences across countries and types of firms remain – and the Covid-19 shock may have exacerbated them. This report analyses European firms' investment in training over the last six years examining trends, factors supporting training investment as well as the impact of the Covid-19 shock. We base the empirical analysis on a unique dataset, the European Investment Bank's Investment Survey (EIBIS), which allows tracking corporate training investment on a yearly basis. To understand dynamics underpinning firms' decision to invest in their workforce, we examine transition patterns and employ dynamic panel data estimation. Finally, we analyze the impact of the Covid-19 pandemic on firms' investment in workforce training and transitions in and out of training. We find that despite a slow upward trend in training investment observed in recent years, supported by labour market recovery, differences across firms and countries have persisted. The pandemic risks aggravating these, through its asymmetric impact on labour markets and differences in corporate innovation, firm structure and resilience. While firm training can be an important element for firms and their workforce to adjust to the post-pandemic environment, asymmetries in training investment could make it harder for those already lagging. The paper concludes with a discussion of policy implications.

Keywords: training; skill gaps; investment; COVID-19; panel data; EIB Investment survey (search for similar items in EconPapers)
JEL-codes: C23 D22 E22 J24 M53 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2022-06
New Economics Papers: this item is included in nep-eec, nep-hrm, nep-lma and nep-sbm
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Working Paper: Corporate training and skill gaps: Did Covid-19 stem EU convergence in training investments? (2022) Downloads
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