Technical Change and the Returns and Investments in Firm-level Training: Evidence from Thailand

This paper examines determinants of investments in and returns to training with focus on technical changes using employee panel data in Thai manufacturing industries. Empirical findings demonstrate significant returns to both on-the-job and off-the-job training in first-difference fixed effect estimation of wage equations, controlling for technical changes which differentially influence training investments and the returns. First, returns to informal on-the-job training are robust, contrary to findings from developed countries. Second, technical change induces both on-the-job and off-the-job training, and controlling for technical change makes returns to on-the-job training even larger. Implications for training and education policies are discussed.