Corporate Training and Skill Gaps: Did COVID-19 Stem EU Convergence in Training Investments?

39 Pages Posted: 10 Jun 2022

See all articles by Konstantinos Pouliakas

Konstantinos Pouliakas

University of Aberdeen - Business School; Cedefop; IZA Institute of Labor Economics

Patricia Wruuck

European Union - European Investment Bank

Abstract

European firms have increasingly invested in training of employees but differences across countries and types of firms remain – and the Covid-19 shock may have exacerbated them. This report analyses European firms' investment in training over the last six years examining trends, factors supporting training investment as well as the impact of the Covid-19 shock. We base the empirical analysis on a unique dataset, the European Investment Bank's Investment Survey (EIBIS), which allows tracking corporate training investment on a yearly basis. To understand dynamics underpinning firms' decision to invest in their workforce, we examine transition patterns and employ dynamic panel data estimation. Finally, we analyze the impact of the Covid-19 pandemic on firms' investment in workforce training and transitions in and out of training. We find that despite a slow upward trend in training investment observed in recent years, supported by labour market recovery, differences across firms and countries have persisted. The pandemic risks aggravating these, through its asymmetric impact on labour markets and differences in corporate innovation, firm structure and resilience. While firm training can be an important element for firms and their workforce to adjust to the post-pandemic environment, asymmetries in training investment could make it harder for those already lagging. The paper concludes with a discussion of policy implications.

Keywords: training, skill gaps, investment, COVID-19, panel data, EIB Investment survey

JEL Classification: J24, M53, C23, D22, E22

Suggested Citation

Pouliakas, Konstantinos and Pouliakas, Konstantinos and Wruuck, Patricia, Corporate Training and Skill Gaps: Did COVID-19 Stem EU Convergence in Training Investments?. IZA Discussion Paper No. 15343, Available at SSRN: https://ssrn.com/abstract=4129671 or http://dx.doi.org/10.2139/ssrn.4129671

Konstantinos Pouliakas (Contact Author)

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

Cedefop ( email )

PO Box 22427
Finikas (Thessaloniki), 55102
Greece

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Patricia Wruuck

European Union - European Investment Bank

98-100 Boulevard Konrad Adenauer
L-2950
Luxembourg

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