Informal Education and Productivity

Abstract

The formal and informal education have a significant impact on human capital accumulation, which is strongly influencing the growth and development of a country. While the formal education is acquired especially through the learning system, the informal one is correlated to the professional experience at the workplace, both of them being considered a long-term investment. Because the educational effort is indirectly related to the preference rate in time and directly related to the school efficiency, people have to rationally choose between the time spent working and the period spent with education, giving up on one of these activities. Yet, there is an alternative that reduces the necessity of the substitution through the factor time and which leads to an endogenous knowledge accumulation, into the productive act: the learning-by-doing process. Unfortunately, in Romania this is a concept very vague defined and applied, even in the case of the multinational corporations' subsidies.