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Human Capital Investment and Development: The Role of On-the-job Training

Xiao Ma, Alejandro Nakab () and Daniela Vidart

No 2021-10, Working papers from University of Connecticut, Department of Economics

Abstract: Workers in richer countries experience faster rates of wage growth over their lifetimes than workers in poorer countries. We offer an explanation for this pattern by showing that workers in richer economies receive more firm-provided training. Using cross-country enterprise and worker-level data, we document that the share of workers who receive firm-provided training increases with development, and that firm-provided training is a key determinant of workers’ human capital. We then build a general equilibrium search model with firm-provided training investments. Our model suggests that firm-provided training accounts for 38% of cross-country wage growth differences and 12% of cross-country income differences.

Keywords: On-the-Job Training; Human Capital Accumulation; Lifecycle Wage Growth (search for similar items in EconPapers)
JEL-codes: E24 J24 J63 J64 M53 O11 O15 (search for similar items in EconPapers)
Pages: 70 pages
Date: 2021-05, Revised 2022-08
New Economics Papers: this item is included in nep-cwa, nep-dge, nep-mac and nep-tid
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