Is Levy-Grant Scheme for Employer-Provided Training Effective? The Experience of Korean Employment Insurance System

Abstract

This paper examines the effects of levy-grant scheme for employer-provided training in Korea. Constructing three-year panel data, I investigate whether the training grant intended to encourage corporate training affects firm behavior and performance. The major findings are that training grant stimulates corporate investment in training and ultimately leads to the improvement in corporate performance. These findings suggest that training levy-grant scheme might be one of institutional arrangements to cope with the under-investment problem in training.