The Return to Firm Investment in Human Capital

Download or read book The Return to Firm Investment in Human Capital written by Rita Almeida and published by World Bank Publications. This book was released on 2006 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper the authors estimate the rate of return to firm investments in human capital in the form of formal job training. They use a panel of large firms with unusually detailed information on the duration of training, the direct costs of training, and several firm characteristics such as their output, workforce characteristics, and capital stock. Their estimates of the return to training vary substantially across firms. On average it is -7 percent for firms not providing training and 24 percent for those providing training. Formal job training is a good investment for many firms and the economy, possibly yielding higher returns than either investments in physical capital or investments in schooling. In spite of this, observed amounts of formal training are small.