The Return to the Firm Investment in Human Capital

Rita Almeida () and Pedro Carneiro

No 1937, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper we estimate the rate of return to firm investments in human capital in the form of formal job training. We use a panel of large firms with unusually detailed information on the duration of training, the direct costs of training, and several firm characteristics such as their output, workforce characteristics and capital stock. Our estimates of the return to training vary substantially across firms. On average it is -7% for firms not providing training and 24% for those providing training. Formal job training is a good investment for many firms and the economy, possibly yielding higher returns than either investments in physical capital or investments in schooling. In spite of this, observed amounts of formal training are very small.

Keywords: on-the-job training; panel data; production function; rate of return (search for similar items in EconPapers)
JEL-codes: C23 D24 J31 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2006-01
New Economics Papers: this item is included in nep-cfn and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published - published in: Labour Economics, 2009, 16 (1), 97-106

Downloads: (external link)
https://docs.iza.org/dp1937.pdf (application/pdf)

Related works:
Journal Article: The return to firm investments in human capital (2009)
Working Paper: The return to firm investments in human capital (2008)
Working Paper: The return to firm investment in human capital (2006)
Working Paper: The return to firm investment in human capital (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp1937

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().