Does training generally work? : Explaining labour productivity effects from schooling and training

Over the past decade, researchers have been increasingly concerned with the effects of training. Whereas Gary Becker stated that employers pay for specific training and employees for general training, it is often argued that employers provide general training as well and that this has a positive effect on labour productivity. So far empirical research does not indicate that only on‐the‐job training is beneficial to the firm and neither that only employees profit form general training. This paper presents a sector model that measures the effect of training on productivity. The sector model developed in this paper has important advantages as it shows that training generally works, but it is not clear whether this is mainly due to on‐the‐job or off‐the‐job training.