Employer-Provided Training and Productivity: Evidence from a Panel of Japanese Firms

         
Author Name MORIKAWA Masayuki (Vice President, RIETI)
Creation Date/NO. February 2019 19-E-005
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Abstract

This study presents evidence on the quantitative relationship between employer-provided training and productivity among Japanese firms. The important contributions of this study are its construction of a panel of training stock at the firm-level, its distinction between manufacturing and service firms, and its comparison of the relative contribution of training to productivity and wages. The results indicate, first, that training significantly contributes to the labor productivity of the firm. Second, the estimated elasticity of productivity with respect to training stock is greater for service firms than for manufacturing firms. Third, the elasticities of productivity and wages to training stock are similar in size, meaning that the returns to firms' training investments are shared by their workers in proportion to the wage share of the value-added. These results suggest that policies to promote firms' training investments have the potential to improve productivity and wages, particularly for firms in service sector.

This is the English version of the Japanese Discussion Paper (18-J-021) with some additional information and changes.