The return to the firm investment in human capital

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 1937

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Wage Level and Structure; Wage Differentials
• Subject: on-the-job training ; panel data ; production function ; rate of return ; Bildungsinvestition ; Humankapital ; Berufsbegleitende Ausbildung ; Return on Investment ; Großunternehmen ; Panel

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Almeida, Rita K. ; Carneiro, Pedro
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/33338
• Last update: 10.03.2025, 11:43 AM CET