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When Do Firms Choose to Train? The Roles of Labour Regulations, Their Enforcement, and Firm and Industry Characteristics

Abstract This article estimates the effects of rigid labour regulations, their enforcement and other conditions facing individual firms on the likelihood that a firm offers training to its workers. The estimates are based on firm-level data from the Enterprise Surveys. The findings show that the effects of labour regulations vary considerably across firms in ways that reflect interaction between labour regulations on the one hand and enforcement, institutional conditions and firm and industry characteristics on the other. The effects also vary considerably from one type of labour regulation to another and according to the perceived importance of alternative constraints on its business.