Employer's Contribution to Training

A highly skilled workforce is widely viewed as essential for prosperity in economies characterised by rapid technological change. However, the development of high level skills across the workforce is expensive and requires major investment from individuals, governments and employers. This report explores an alternative approach to estimating Australian employers' contribution to skills development of the workforce. The measure is based on the increase of workers' productivity as a result of learning skills on the job. Workers'productivity is obtained by observing how fast wages grow with additional years of general work experience and of tenure with the current employer. The author estimates that, on this basis, total investment in employment-based training is much larger than previously believed.