Training Funds and the Incidence of Training: The Case of Mauritius

Oluyemisi Kuku, Peter Orazem, Sawkut Rojid () and Milan Vodopivec
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Sawkut Rojid: World Bank

No 8775, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Training funds are used to incentivize training in developing countries, but the funds are based on payroll taxes that lower the return to training. In the absence of training funds, larger, high-wage and more capital intensive firms are the most likely to offer training unless they are liquidity constrained. If firms are not liquidity constrained, the fund could lower training investments. Using an administrative dataset on the Mauritius training fund, we find that the firms most likely to train pay more in taxes than they gain in subsidies. The smallest firms receive more benefits than they pay in taxes.

Keywords: training; general skills; firm-specific skills; training fund; externality; cross-subsidy; tax (search for similar items in EconPapers)
JEL-codes: M53 O15 O2 O55 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2015-01
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Related works:
Journal Article: Training funds and the incidence of training: the case of Mauritius (2016)
Working Paper: Training funds and the incidence of training: the case of Mauritius (2016)
Working Paper: Training Funds and the Incidence of Training: The Case of Mauritius (2015)
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