Firm and Taxpayer Returns from Training of Semiskilled Employees

Abstract

In response to the increasingly rapid occurrence of skill obsolescence, governments are exploring programs to provide incentives for worker training. Net present value analysis was used to assess the benefits of subsidized computer training for semiskilled officer workers in Canada, Results suggest that government sponsorship yielded positive returns for taxpayers and firms, provided training was general and not firm-specific. High turnover made firm-specific training unattractive. A combination of on-the-job training for practice and classroom instruction for general training appears most beneficial for both employees and firms. The findings shed new light on the applicability of human capital theory in a rapidly changing work environment.