On-the-job training and productivity: Firm-level evidence from a large developing country

We investigate the effects of on-the-job training on firm productivity and wages using a large panel data set constituted of all large and medium size manufacturing firms in China over 2003-2007. We estimate firm productivity carefully with a recent semiparametric method and combine the propensity score matching and the difference-in-differences techniques to estimate the treatment effect of training. We find consistent evidence that i) training helps boost firm productivity and wages; ii) the higher the training expenditure per capita, the higher the increase in productivity and wages; iii) firms benefit more from training than workers. These findings are not sensitive to industrial capital intensity or firm ownership structure. (C) 2016 Elsevier Inc. All rights reserved.