Employer-provided training and productivity: Evidence from a panel of Japanese Firms

Abstract

This study presents evidence on the relationship between employer-provided training and productivity. The important contributions of this study are its comparison of the relative contribution of training to productivity and wages and its distinction between manufacturing and service firms. The results indicate that training significantly contributes to the labor productivity, particularly for firms in the service sector. 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.