Two strands of econometric analysis were undertaken – the first to assess the impact of training on productivity and the wage bill controlling for both publicly funded training (derived from the matched ILR-EDS-IDBR data) and overall training intensity (derived from the ESS) at . The second strand of analysis replicated the industry-level approach at (although with substantial gaps in the available data).
At industry-level, the analysis suggests that raising overall training intensity by 1 percentage point is associated with an increase on productivity of about 0,74% and around 0,36% on the wage. However, it was not possible to identify any unambiguous impact of publicly funded training leading for a formally recognised qualification on either the productivity or wage-bill measure. Although these estimates in relation to any form of training are in line with previous analyses using training intensity at the industry level (e.g. Dearden (2005)), the result is never significant in the specification controlling for the endogeneity on training decisions unlike previous research, (i.e. whether training leads to higher productivity or whether more productive firms are likely to engage more in training).
At firm-level, there are currently large evidence gaps in the data. Although estimated coefficients point towards a positive relationship between publicly funded training and firm level outcomes, the lack of firm-level data for key variables (i.e. capital stock and privately funded training); inconsistencies in relation to employment measures (i.e. individual enterprises having different measures of employment depending on the data source); as well as the length of the time series currently available (4 years), make the firm-level results very speculative at this stage. Furthermore, any robust analysis using panel data techniques can only be undertaken on firms repeatedly available over time in the Annual Business Survey (ruling out small and micro firms). As a result of these data limitations, the analysis does not indicate the absence of any impact of publicly funded training on productivity, but rather than we are unable to draw any strong conclusions due to deficiencies in the underpinning data.
Chosen excerpts by Job Market Monitor. Read the whole story at Estimating the impact of publicly funded training on industry and firm-level outcomes