Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 592: Employer-Sponsored Training in Stabilisation and Growth Policy Perspectives

Christina HÃ¥kanson (), Satu Johanson and Erik Mellander ()
Additional contact information
Christina HÃ¥kanson: The Research Institute of Industrial Economics, Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Satu Johanson: PriceWaterhouseCoopers AB, Postal: Torsgatan 21, SE-113 97 Stockholm, Sweden
Erik Mellander: Institute of Labour Market Policy Evaluation (IFAU), Postal: P.O. Box 513, SE-751 20 Uppsala, Sweden

Abstract: In Europe, accounting standards prevent larger expenditures on employer-sponsored training from being treated as investments. Using Sweden as example, we discuss two consequences for training. First, the timing: training will be conducted when income is large enough for training costs to be deducted without loss. This is more often possible during booms than recessions, providing a stabilisation policy dimension to training. Second, the volume: the training opportunity cost (foregone production) is largest during booms. Hence, training tends to be smaller than if conducted during downturns, possibly limiting growth.We formulate two proposals that can make training more counter-cyclical and increase the amount of training.

Keywords: Training; Accounting System; Timing; Growth

JEL-codes: D21; E32; H25; M41; M53

30 pages, March 10, 2003

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