Does Rising Societal Education Increase or Decrease Employer Training?

Abstract

This study investigates how employer-provided training responds to increases in societal education levels. Do employers provide more training in order to take advantage of education-training complementarity effects, or do they reduce their training investments because workers can now acquire more skills via external sources? Using Korean data and an identification strategy based on historical educational attainment, we find that that employers increase training as education levels rise, but this positive effect is concentrated in specific rather than general skills, and in long rather than short employment relationships. Importantly, rising levels of college attainment yield positive training effects for non-college-educated workers. Unions amplify the positive employer training responses.

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