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The impact of training on productivity: evidence from a panel of Italian firms

Emilio Colombo (Department of Economics, University Milano Bicocca, Milan, Italy)
Luca Stanca (Department of Economics, University Milano Bicocca, Milan, Italy)

International Journal of Manpower

ISSN: 0143-7720

Article publication date: 28 October 2014

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Abstract

Purpose

The purpose of this paper is to investigate the effects of training activity on labor productivity in a panel of Italian firms.

Design/methodology/approach

The use of a large panel data of individual firms allows the author to properly account for the possible endogeneity of training activity and avoid aggregation biases typical in industry-level data.

Findings

The paper finds that training has a positive and significant impact on productivity. While unobserved heterogeneity leads to overestimate the impact of training, failing to account for the endogeneity of training leads to underestimate its effects on productivity. Within occupational groups, training has large and significant effects for blue-collar workers, while the effects for executives and clerks are relatively small. Finally, using a measure of effective training intensity the paper finds that failing to account for training duration may lead to underestimate the effect of training on productivity.

Originality/value

Our data set is unique in terms of size and coverage and overcomes several limitations of previous research using firm-level data. Moreover, besides estimating the overall effect of training on productivity, the paper allows to address some more specific questions. Does the effect of training depend on the type of worker being trained? What is the relevance of effective participation to training activity?

Keywords

Acknowledgements

JEL Classifications — C23, D24, J31

The authors thank two anonymous referees whose comments significantly contributed to the improvement of the paper. The authors thank Unioncamere for granting access to the Excelsior data set, participants to the 2008 AIEL Conference for helpful comments, and Pietro Aimetti, Cecilia Corrado and Andrea Gianni for assistance with the Excelsior data set. The views expressed are those of the authors and do not necessarily reflect the position of Unioncamere. The usual disclaimer applies.

Citation

Colombo, E. and Stanca, L. (2014), "The impact of training on productivity: evidence from a panel of Italian firms", International Journal of Manpower, Vol. 35 No. 8, pp. 1140-1158. https://doi.org/10.1108/IJM-08-2012-0121

Publisher

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Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited