Firm-Sponsored On-the-Job Training And Human Capital Formation Of Rural Migrant Labor

On-the-job training, which is equally important with schooling as a form of human capital investment, is crucial for rural migrant labors'human capital formation because they have always gotten limited formal education campared to urban labors. Under the practical background of "rural-urban" labor migration in China and the analytic framework of modern human capital theory, this thesis investigates the on-the-job training of rural migrant labors. Using extensive data and empirical analysis of multi-level and all angles, this study illuminates whether and how the rural labors migrating to non-agricultural industries get effective on-the-job training, then systematically answer the scientific question:how does the firm-sponsored on-the-job training take place and how to improve it under the condition of high turnover.This thesis begins with summarizing classic literature and main viewpoints in modern human capital theory, thus forms the theoretical framework based on cost-benefit analysis for this paper and locates this topic in relevant theoretical system. Then the historical process of rural-urban labor migaration in China is overviewed. Estimating the new trend of current labor migration by the latest statistics ever scince 2003, this paper points out the importance of human capital is increasingly obvious during the labor migration, which constructs the practical starting point for this paper.The empirical study in this paper is developed by three levels. Firstly, the impacts of firm characteristics on the supply of on-the-job training are discussed from the angle of firm. This paper finds that capital-intensive firm is more active in providing training investment compared to labor-intensive firm. In the aspect of firm proprietary, publis ownership firm is most likely to supply training investment for rural migrant labor, the following firm type orderly is share-holding company, private enterprise (including individual enterprise) and foreign capital enterprise. And firm size is positive correlated with on-the-job training investment. Such training investment structure disatvantages rural labor because they are always difficult to get the employment opportunities from public ownership firm or capital-intensive large firm.Secondly, this paper analyzes the impact of labor individual demographic characteristics and employment characteristics on obtaining of on-the-job training from employee angle, and finds that it is truly that rural labor gets less opportunity than urban labor, which can be attributed to lower education and higher turnover rate of rural labor. Thereby it is necessary to ensure stability of employment by labor contract in short term and expand investment of rural elementary education in long term for increasing the probability of gaining on-the-job training for rural labor.Thirdly, this paper argues that firm is more willing to provide firm-specific on-the-job training and prefers to undertake the cost of training lasting seven days or less by analyzing the mechanism of training cost deviding. The employees with higher level of human capital stock or higher income have more chance to get financial aid of training from firm. Without intervening and directing, the pattern of cost deviding forming spontaneously within firm will expand the gap of human capital and the income inequality between rural and urban labor.In the end, this thesis summarizes experience from other countries and discusses the policy implications of main findings in this paper on skill upgrading of rural migrant labor. It is not advisable to rely on adjusting completely by laissez faire market or supplying training completely by government, but it is rather emphasize the function of firm under directing and intervening by government. In order to facilitate formation of human capital for rural migrant labor, government should utilizing public resources to compensate for shortage of firm training investment caused by high turnover on one hand, and push the process of integration of rural and urban labor market to establish crucial conditions for stable employment of rural migrant labor on the other hand.