Question

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
nondefective 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’s decision to train its workers will be independent of worker
characteristics? What are some of those measurable and unmeasurable worker characteristics?
(iii) Name a factor other than worker characteristics that can affect worker productivity.
(iv) If you find a positive correlation between output and training, would you have convincingly
established that job training makes workers more productive? Explain

Answer 1

(i) The ceteris paribus thought experiment underlying this policy question is that all other variables that may affect worker productivity, such as worker characteristics and working conditions, remain constant while evaluating the impact of job training on worker productivity.

(ii) It is unlikely that a firm's decision to train its workers will be independent of worker characteristics. Measurable worker characteristics that may affect a firm's decision to train its workers include education, experience, and skills. Unmeasurable worker characteristics, such as motivation and work ethic, may also play a role in a firm's decision to train its workers.

(iii) The working conditions, such as the quality of machinery and equipment, can affect worker productivity. Additionally, the level of supervision and management practices can also affect worker productivity.

(iv) Finding a positive correlation between output and training is not sufficient to convincingly establish that job training makes workers more productive. Correlation does not necessarily imply causation, and other factors that are not controlled for in the analysis may be driving the observed correlation. To establish a causal relationship between job training and worker productivity, a randomized controlled trial or a natural experiment that addresses potential confounding factors is needed.