Dissertation

The effects of employer-sponsored training on labor productivity

Lyau, Nyan-Myau

1994

Overview

The purpose of this study was to investigate to what extent a firm's investment in training might impact its labor productivity. Data were collected through a questionnaire developed by the investigator. All 237 large and medium auto parts firms in Taiwan were surveyed yielding a response rate of 68.4%. Multiple measures were used for both labor productivity (sales per worker and value-added per worker) and training investment (training vs. no training, total training cost, direct training cost, and percent of workers trained). An econometric model of the relationships between variables was developed and served as a fundamental basis for deriving multiple regression models. Statistical tests consisted of three tests in two phases. In the initial phase, the relationship between training and labor productivity was examined with statistical adjustment for three major control variables (capital, labor, and material). Results that were identified as significant were re-tested in the second phase by (1) statistically adjusting for a set of additional control variables that might have effects on labor productivity and (2) correcting for endogeneity, a contemporaneous correlation between the training variable and the error term in the multiple regression. As predicted in the conceptual framework of this study, the results showed a positive, significant relationship between training and labor productivity while statistically adjusting for the three major control variables. This relationship was robust when the set of additional control variables was entered into the model. Correcting for a possible endogeneity effect did not affect the effect size (indicated by the partial regression coefficient) of the relationship between training and labor productivity. The effect size (also known as elasticity of labor productivity with respect to training) was fairly consistent across all tests, ranging between.10 and.12. Hence, the findings of this study reveal the existence of a positive relationship between training and labor productivity at the firm level. These findings are particularly useful for training practitioners in establishing economic accountability of training in today's business world.

• Publisher: ProQuest Dissertations & Theses
• Subject: Labor economics / Labor relations / Vocational education
• ISBN: 9798208828823