HRSDC-IC-SSHRC Skills Research Initiative

Working Paper Series

Employer-Sponsored Training by Firm Size
by Richard Chaykowski and George Slotsve.

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Abstract

Firm-level training activity is a major source of labour force skills formation in Canada and the United States and, therefore, important to productivity growth. The focus of this paper is the relationship between firm size and employer sponsored training. The main issues considered are whether or not the types and overall level of training activity generated by employers is adequate, whether some firms under-invest in training, and whether there are labour market or other institutional factors present that impede employer-sponsored training activity.

The paper begins by considering firm size and labour productivity, and finds that both shifts in product demand and technological innovation are important factors that could affect training by firm size. As well, the level, amount, and type of employer sponsored training activity undertaken in smaller versus larger firms may be related to the different benefits and costs of such training across firms of different sizes. Another focus is the importance of internal-to-the-firm organizational structures for employer training and changes in organizations, the workforce, and employment for employer-sponsored training in smaller versus larger firms.

The paper develops further research areas, including sources of variation in the benefits and costs of training, the relationship between institutional arrangements and training outcomes, who receives training and who does not within firms of different sizes, barriers to training in small versus large firms, the nature of formal versus informal training in small versus large firms, and the impact of alternative policy regimes on training outcomes. The paper identifies the potential value of data sets such as the WES in furthering a more comprehensive research agenda on training and firm size, and considers the value of supplementing large-scale data sets with analysis based on industry or firm-level administrative or case studies in order to account for the effects of institutional factors on training outcomes.