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Job-Related Training and Benefits for Individuals: A Review of Evidence and Explanations

Author

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  • Bo Hansson

    (OECD)

Abstract
This paper reviews the literature on job-related training and the effects of these investments for different groups of individuals. The paper also elaborates on the theories, empirical explanations, and policy implications that can be drawn from these findings. Employer-provided training is by far the most important source of further education and training after an individual enters the labour market. A substantial portion of these human capital investments are financed by firms and it appears that the contribution by individuals are in most circumstances relatively modest. At the same time, substantial gains for individuals participating in training are documented in a large number of studies. The benefits are not only confined to wage returns as research has also shown that training leads to increased internal employability and job-security; and external labour market effects such as higher labour participation rates, lower unemployment, and shorter unemployment periods. Training is not equally distributed among employees. Older, low skilled workers, and to some extent female workers typically receive less training than other groups of employees. However, we do not find any clear-cut evidence that returns to training varies with gender, educational or skills levels, which suggests that inequalities do not arise because of differences in returns to training, but are more a consequence of inequalities of the distribution of training investments. The findings of this review further suggest that the returns to training are higher in the case that it is financed by the employer and that the returns to training are substantially higher for those leaving for a new employer. Employer-financed training appears, however, to lower the probability of an individual leaving for a new job elsewhere. The analysis of the distribution of returns to training reveals that although individuals benefit from these investments, the employer reaps most of the returns to training which suggests that the productivity effects are substantially larger than wage effects.

Suggested Citation

  • Bo Hansson, 2008. "Job-Related Training and Benefits for Individuals: A Review of Evidence and Explanations," OECD Education Working Papers 19, OECD Publishing.
    • Handle: RePEc:oec:eduaab:19-en
    DOI: 10.1787/237755412637
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    Citations

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    Cited by:

    1. Bernd Fitzenberger & Grit Muehler, 2015. "Dips and Floors in Workplace Training: Gender Differences and Supervisors," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(4), pages 400-429, September.
    2. Ehlert, Martin, 2017. "Who Benefits from Training Courses in Germany? Monetary Returns to Non-formal Further Education on a Segmented Labour Market," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 33(3), pages 436-448.
    3. Nicola Brandt, 2015. "Vocational training and adult learning for better skills in France," OECD Economics Department Working Papers 1260, OECD Publishing.
    4. Travkin, Pavel, 2014. "The impact of the on-the-job training on Russian worker’s salary: The effect of abilities approach," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 33(1), pages 51-70.
    5. Blyde, Juan, 2016. "Exports and Labor Skills: The Role of Training," MPRA Paper 72150, University Library of Munich, Germany.
    6. Pavel V. Travkin, 2014. "The Returns To Training In Russia: A Difference-In-Differences Analysis," HSE Working papers WP BRP 56/EC/2014, National Research University Higher School of Economics.
    7. Hamori, Monika, 2023. "Self-directed learning in massive open online courses and its application at the workplace: Does employer support matter?," Journal of Business Research, Elsevier, vol. 157(C).
    8. Nwokeiwu Johnson & Ziska Fields & Nwali Anthony Chukwuma, 2019. "Training, Organisational Commitment and Turnover Intention among Nigerian Civil Servants," Journal of Economics and Behavioral Studies, AMH International, vol. 10(6), pages 1-15.
    9. Julia Lang, 2012. "The Aims of Lifelong Learning: Age-Related Effects of Training on Wages and Job Security," SOEPpapers on Multidisciplinary Panel Data Research 478, DIW Berlin, The German Socio-Economic Panel (SOEP).
    10. Lang, Julia, 2012. "The aims of lifelong learning: Age-related effects of training on wages and job security," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62073, Verein für Socialpolitik / German Economic Association.
    11. Silva, Carlos Eduardo Lobo e & Hewings, Geoffrey J.D., 2010. "A Decisão sobre Investimento em Capital Humano em um Arranjo Produtivo Local (APL): Uma Abordagem Teórica," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 64(1), March.
    12. Florence Lebert & Erika Antal, 2016. "Reducing Employment Insecurity," SAGE Open, , vol. 6(4), pages 21582440166, October.

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