Human capital investments and the value of work

Abstract

What happens to human capital accumulation if there is no ‘organization’ to invest in the worker? This study examines whether and how human capital investments differ between solo self-employed workers and employees, and how training is associated with individuals’ work engagement and their self-assessed prospects for career advancement. We analyze data from the sixth European Working Conditions Survey (2015). The results show that whereas employees on temporary contracts relatively often report that they are in need of further training, solo self-employed workers have the skills to deal with more demanding duties. Although solo self-employed workers more frequently participate in substantial self-financed training, in general, both the solo self-employed and employees on temporary contracts stay significantly behind in their participation in training activities compared to employees with permanent contracts. We conclude that for workers with permanent contracts training has a positive relationship with both work engagement and their perceived prospects for career advancement. For those on temporary contracts and the solo self-employed, human capital investments seem to have more of a ‘transactional’ function and to contribute, mainly, to how they assess their prospects.