Workplace training in Myanmar: Determinants and wage returns

Abstract

Using linked employer-worker panel data from Myanmar, we estimate wage returns to workplace training. First, we document a low prevalence of training in manufacturing enterprises. Second, we find the wage premium associated with training of about 7%, which is in the range found in other South-East Asian countries. Third, we show that workplace training is offered selectively to workers and when this is the case, the wage gap between trained and untrained workers doubles. Fourth, we find that previous training does not contribute to higher present wage, which indicates low transferability of workplace training in Myanmar. While this setup may benefit employers, workers get short-lived benefits from training, which do not carry throughout the working life. Fifth, we find a convex profile of the returns to training with respect to education and that specific industries such as food, apparel and printing lend themselves more to the benefits from training. Considering the wage return as a lower bound of productivity gains from training, our results suggest that government support of workplace training programs could help increase performance of the manufacturing sector in Myanmar.