The Skills to Pay the Bills: Returns to On-the-job Soft Skills Training

Wednesday, 30 November, 2016
Abstract: 
The willingness of firms to provide general training to workers depends on the productivity gains from training and the likelihood that workers are retained. In this paper Adhvaryu, Kala and Nyshadham (2016) evaluate the impacts of training in soft skills development on the workplace outcomes of female garment workers in Bengaluru, India. They implemented a lottery determining access to the program by randomizing lines and then workers within lines to treatment, which allows us to capture treatment effects and program spillovers. They find that despite a high overall turnover rate, more treated workers are retained during the training period; this difference disappears after training is complete. Treated workers are 12 percent more productive than controls. Within-team spillovers in productivity and task complexity are substantial. Survey outcomes support the hypothesis that the program increased the stock of soft skills, which raised workers’ marginal products. Wages increase by 0.5 percent after program completion. Pairing their point estimates with program costs, they calculate that the net return to on-the-job soft skills training for garment workers is large – about 250 percent 9 months after program completion.