A justification for job training programs is that they impro

A justification for job training programs is that they improve worker productivity. Suppose that you are asked to evaluate whether more job training makes workers more productive. However, rather than having data on individual workers, you have access to data on manufacturing firms in Ohio. In particular, for each firm, you have information on hours of job training per worker (training) and number of non-defective items produced per worker hour (output).

(i) Carefully state the ceteris paribus thought experiment underlying this policy question.

(ii) Does it seem likely that a firm

Solution

I) We wish to know whether, ceteris paribus, workers are more productive if they have recieved more training.

ii) A firm\'s decisions on training are probably not independent of their workers\' characteristics: a firm with motivated, easy to train individuals will prefer more training than a firm with unmotivated, difficult to train workers. Some characteristics of workers are how smart they are, how hard working they are, and how long they\'re likely to stay with your company. (the last being mostly immeasurable)

iii) Capital stock (aka how good the equipment they\'re using is)

iv) Not necessarily; it might also be that industries which attract more productive workers also train their workers more, or a number of other alternative situations that would produce the same correlation.