Should Human Capital Development Programs be Mandatory or Voluntary? Evidence from a Field Experiment on Mentorship

Abstract

In a field experiment, we find that a mandatory mentorship program raises worker productivity while a voluntary version of the program does not. A significant reason why the mandatory program results in larger gains is that the lowest productivity employees do not participate when the program is voluntary, despite their having the greatest treatment benefits. A nationally representative survey of U.S. workers shows wide variation in human capital development program participation, suggesting that understanding self-selection is important for firms’ returns on these programs across a variety of settings. Our findings have implications for resource allocation, experimental design, productivity dispersion, and inequality.

Keywords: Human Capital Development, RCT, Mentorship, Training, Personnel Economics, Program Evaluation

JEL Classification: C93, M53, M54