The effect of training on productivity: The transfer of on-the-job training from the perspective of economics

Although the transfer of on-the-job training to the workplace belongs to the realm of educational research, it is also highly related to labour economics. In the economic literature, the transfer of training is based on the theoretical framework of human capital theory and has been extensively analysed empirically in econometric studies that take account of unobserved heterogeneity of workers and the selectivity in training participation. The aim of this paper is to give an overview of the underlying theoretical paradigm in economics, and the challenges faced in empirical research. The economic literature finds that participation in training is beneficial for both the participating workers and their employers, although there is also evidence that selectivity of workers matters. Despite this progress in the economic literature, the underlying processes through which training leads to a higher productivity remain unclear. We argue that this 'black box' offers opportunities for multi-disciplinary research projects on the transfer of training that relate the perspectives of educational and economic research. (C) 2012 Elsevier Ltd. All rights reserved.