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Participation in Industrial Training Programs

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Working Paper Number SEHSD-WP1988-06 or SIPP-WP-60

In this paper newly available data from the Bureau of the Census Survey of Income and Program Participation (SIPP) are examined to explore the relationship between firm size and worker participation in training programs both at work and outside of work.

Training programs outside of work, principally in the form of vocational training, have been the subject of many studies, but only recently has attention been directed at industrial training. Little is known about who participates in industrial training and even less is known about who provides this form of training. Based on their analysis of Current Population Survey and National Longitudinal Survey data, Lillard and Tan (1986) suggest there is a complementarity between formal schooling and participation in a company training program, but they do not consider the relationship between this form of training and firm size. In separate studies of American and Canadian firms, Barron, Black, and Lowenstein (1984) and Simpson (1984), respectively, found that training programs are more prevalent among large firms than small ones. In the former study prevalency is based, in part, on the probability of a firm's most recently hired worker receiving formal training by management; in the latter study prevalency is measured by duration in months of industrial nonapprenticeship training programs. Being based on employer surveys the empirical data of these studies do not include information about the worker characteristics. Like the Lillard and Tan study, this one is based on a household survey but it also contains information about the size of a firm in which respondents were employed based on a household survey but it also contains information about the size of a firm in which respondents were employed.

The size of firm information permits investigation of two predictions derivable from the recent literature on firm beterogenity and the matching of workers and firms. The major findings of the paper, namely, that large firms provide more specific training than small ones that this type of training is most often given to workers who have invested in human capital are consistent with the implications of the models developed in the literature. As indicated below we also look at where workers who participate in a training program outside of work are employed, i.e., in small or large firms, and the extent to which firms of different size pay for training taken outside of the work place.

Page Last Revised - October 8, 2021
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