Who Benefits from Training and R&amp;D, the Firm or the Workers?

Ballot, Gérard; Fakhfakh, Fathi; Taymaz, Erol

doi:10.1111/j.1467-8543.2006.00509.x

Cited by 123 publications

(110 citation statements)

References 54 publications

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“…This finding is somewhat different from most previous literature that compares the effects of training on firms and workers (Conti 2005;Ballot et al 2006;Dearden et al 2006) that has found stronger evidence of positive effects on organizational performance rather than on wages.…”

Section: Discussioncontrasting

confidence: 56%

“…This applies both to industry levels studies (Conti 2005;Dearden et al 2006) and firm level studies (e.g. Ballot et al 2006). However, while recent empirical studies typically have found that training increases both wages and performance, an important limitation of most of this work is that researchers have been unable to specify whether the training received was general or firm-specific.…”

Section: Introductionmentioning

confidence: 99%

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The effects of general and firm-specific training on wages and performance: evidence from banking

Jones

Kalmi

Kauhanen

2011

Oxford Economic Papers

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By using new panel data for Finnish banks we study the impact of training on wages and performance. To the best of our knowledge, ours is the first paper to compare explicitly the effects of general and firm-specific workplace training on outcomes for both employees and firms. Unlike much existing literature, we find stronger evidence that training improves worker outcomes rather than organizational performance. Depending upon specification, the estimated wage elasticity with respect to training is in the range of 3-7%, whereas the performance effects vary widely depending on the measures of training intensity. The other key finding is that general training is associated with higher wage and performance effects than is firm-specific training. 2 I IntroductionTwo important issues are raised in most economic studies of training. First, does training increase efficiency and by how much? Second, who reaps the gains from training? In addressing these issues, the standard (Beckerian) theory concludes that in competitive markets, employers will not pay for general training. By definition, general training increases employee productivity by the same amount in the current workplace and elsewhere. If employees participate in general training, their employers have to bid up employees' wages reflecting the productivity increases due to training. If they fail to do so, other potential employers can "poach" these workers and free-ride in training expenses. Hence, according to this theory, in competitive labour markets, employers would finance training only if there are some specific elements in it. By contrast, the early empirical evidence on training revealed that employer-provided training is mostly general in nature and that, nevertheless, employers paid the costs of training (e.g. Lynch 1992; Spletzer, 1998, 1999;Barron et al. 1999).To explain this inconsistency between theory and empirics, many subsequent theorists point to imperfections in labour markets. It is argued (e.g. Acemoglu and Pischke, 1999;Manning, 2003) that search frictions, certain labour market institutions (e.g. unions, minimum wages), imperfect competition in small labour markets (Stevens 1994), or asymmetric information in training among current and potential employers may lead to situations where employees capture only a fraction of the productivity gains.These models also imply that wages do not equal marginal revenue product, and this has motivated recent literature that studies the impact of training on productivity and wages 1 .Consistent with theory grounded in imperfect labour markets, more recent empirical 1 For theoretical literature see e.g. Acemoglu and Pischke (1999) and Booth and Zoega (2004). 3 evidence on the impact of training on wages and productivity finds that there is a wedge between wages and productivity effects and that employees and employers seem to share the benefits from training. This applies both to industry levels studies (Conti 2005;Dearden et al. 2006) and firm level studies (e.g. Ballot et al. 2006). However, w...

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Section: Discussioncontrasting

confidence: 56%

Section: Introductionmentioning

confidence: 99%

The effects of general and firm-specific training on wages and performance: evidence from banking

Jones

Kalmi

Kauhanen

2011

Oxford Economic Papers

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“…This would ignore that training participants attend courses frequently and that training returns are a function of the number of courses in Germany. In addition, such a conclusion would also contradict the literature comparing productivity and wage returns to training using firm data (Dearden et al 2006, Groot 1999, Conti 2005, Ballot et al 2006, Kuckulenz 2006, Konings and Vanormelingen 2009). In almost every of these papers, positive and significant wage effects of training are found.…”

Section: Resultscontrasting

confidence: 45%

Continuous training and wages: An empirical analysis using a comparison-group approach

Görlitz

2011

Economics of Education Review

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“…By the same token, the relatively smaller elasticity estimates based on French data may be related to relatively lower levels of R&D intensity in France. 4 However, this is a tentative interpretation because other OECD countries with R&D intensity over the OECD average (e.g., Japan, Korea, Sweden, etc.) are underrepresented in the research on R&D productivity.…”

Section: Insignificant Moderating Variables: Control For Spillovers mentioning

confidence: 96%

“…For example, some primary studies control for spill-over effects (e.g., Aiello andCardamone, 2005: Blanchard et al, 2005;Cincera, 1998;; whilst others do not (e.g., and Hall, 1993). Also, in contrast to the majority of studies that use a static Cobb-Douglas production function specification, some studies use a dynamic specification (e.g., Aldieri et al, 2008;Anon and Higon, 2007;Ballot et al, 2006; or a translog version of the production function (e.g., Cameron et al, 2005;Lehto, 2007;and Smith et al, 2004). Such specification differences are potential sources of heterogeneity in elasticity estimates reported by primary studies.…”

Section: (3a)mentioning

confidence: 99%

R&D Investment, Productivity and Rates of Return: A Meta-Analysis of the Evidence on OECD Firms and Industries

et al. 2014

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The volume of work on productivity effects of research and development (R&D) investment has expanded significantly following the contributions of Zvi Griliches and others to microeconometric work in late 1970s and early 1980s. This study aims to meta-analyse the research findings based on OECD firm and industry data, with a view to establish where the balance of the evidence lies and what factors may explain the variation in reported evidence. Drawing on 1,262 estimates from 64 primary studies, we report that the average effect of R&D capital on productivity and the average rate of return on R&D investment are both positive, but smaller than the summary measures reported in previous narrative reviews and meta-analysis studies. We also report that a range of moderating factors have significant effects on the variation among productivity and rates-of-return estimates reported in primary studies. Moderating factors with significant effects include: (i) measurement of inputs and output; (ii) model specifications; (iii) estimation methods; (iv) levels of analysis; (v) countries covered; and (vi) publication type among others. JEL Classification: D24, O30, O32, C49, C80

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Who Benefits from Training and R&D, the Firm or the Workers?

Cited by 123 publications

References 54 publications

The effects of general and firm-specific training on wages and performance: evidence from banking

The effects of general and firm-specific training on wages and performance: evidence from banking

Continuous training and wages: An empirical analysis using a comparison-group approach

R&D Investment, Productivity and Rates of Return: A Meta-Analysis of the Evidence on OECD Firms and Industries

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