Academic journal article Contemporary Economic Policy

Participation in Workplace Employer-Sponsored Training in Canada: Role of Firm Characteristics and Worker Attributes

Academic journal article Contemporary Economic Policy

Participation in Workplace Employer-Sponsored Training in Canada: Role of Firm Characteristics and Worker Attributes

Article excerpt

I. INTRODUCTION

To be successful in the highly innovative and internationally competitive knowledge-based global economy, Canada must produce, attract, retain, and upgrade the well-educated labor force. In addition to producing new graduates and attracting skilled immigrants, renewing and upgrading skills of the existing labor force remain one of the most challenging and important tasks. Employer-sponsored training is one important vehicle for skills upgrading.

On the one hand, employer-sponsored training in Canada has been falling short of international standards (Government of Canada 2002a, p. 59) but is increasingly demanded across industries (Government of Canada 2002b, p. 41). This is of particular importance considering the Canadian aging population and smaller future cohorts of new workers who would enter the labor force in the years and decades to come.

On the other hand, as illustrated in this work, international evidence indicates that increased market competition, organizational changes, research and development, and technological innovation have raised the demand for job-related training in the United States. But the empirical evidence for Canada is quite limited. Many existing studies on employer-sponsored training are primarily based on household-based surveys (such as the Adult Education and Training Survey [AETS] for Canada) where the information on firm characteristics is not as rich as that in firm-based surveys (such as the Workplace and Employee Survey [WES] for Canada).

Lin and Tremblay (2003) note that many existing Canadian studies have examined employer-sponsored training in programs and courses from the perspective of households but few studies have examined directly workplace job-related classroom and on-the-job training from the perspective of firms. Many studies have examined the relationship between worker attributes and participation in employer-sponsored training based on surveys that contain limited information on firm characteristics (e.g., firm size, industry, and union status) but few studies have examined the role of other critical firm characteristics such as market competition, research and development, technological innovation, and management practices. The WES data link these firm characteristics to their workers' attributes and record workplace classroom and on-the-job training. Therefore, the WES data enable us to better understand workplace training.

This work adds to the literature in the following ways. First, we attempt to evaluate the role of firms' training provision in workers' participation. We find that when firms provide more training, their workers tend to participate more in workplace training. This finding has an important implication to firms and their training decisions. Second, we try to examine how workers' participation is correlated with changes in market competition, organizational changes, and technological innovation. The new evidence from the WES data indicates that changes in market competition, organizational changes, and technological innovation affect workers' participation in workplace training. This finding explains in part why workers in some firms participate more in workplace training than those in other firms. These new findings suggest that there is a strong and direct relationship between those important firm characteristics and workplace training.

The remainder of the work proceeds as follows. In Section II, we review the existing literature and state our key hypotheses about workplace training participation. In Section III, we describe the WES data and highlight some observations based on the statistical analysis of workplace training participation with reference to all of the firm characteristics and worker attributes. In Section IV, we use the econometric models to analyze workplace training participation by taking into consideration all firm characteristics and worker attributes so that we can identify and interpret the net marginal impact of each of these determinants on workplace training participation. …

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