Training within Firms - Working Paper 33670 - Abstract

Oct 13, 2026

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Training investments are essential for improving worker and firm productivity, yet their implementation is often hindered by low participation rates and insufficient worker engagement. This study uses data from three firms—a car manufacturer, a quick-service restaurant chain, and a retail company—to show that variation in training participation among employees is closely tied to differences in middle managers’ behavior and practices. Middle managers who actively engage with employees and emphasize well-being and development are linked to higher training participation, which affects performance and absenteeism, especially during organizational change.

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Introduction

NBER WORKING PAPER SERIES TRAINING WITHIN FIRMS Brayan S. Diaz Andrea Neyra Nazarrett Julian Ramirez Raffaella Sadun Jorge A. Tamayo Working Paper 33670 [http://www.nber.org/papers/w33670](http://www.nber.org/papers/w33670) NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 April 2025 Wethank OrianaBandiera,NickBloom, GuidoFriebel,WouterDessein,Miguel Espinosa,Bob Gibbons, Virginia Minni, Andrea Prat, John Van Reenen and participants in seminars at the 2023 Empirical Management Conference, Olin Business School, Rochester, Bocconi, HBSD³ Research Symposium, LSE, LBS, MIT Sloan, Kellogg, USC, CESifo Summer Institute for their valuable comments. We thank Jessica Avellaneda, Paula Neira, Andres Felipe Rengifo, David Rodriguez-Gonzalez, and Peter Li, for excellent research assistance. Sadun and Tamayo gratefully acknowledge funding from Harvard Business School and the D³ Institute. Diaz and Ramirez: Digital Reskilling Lab; Neyra-Nazarrett: Harvard University; Sadun: Harvard University, Digital Reskilling Lab, NBER and CEPR; Tamayo: Harvard University and Digital Reskilling Lab. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2025 by Brayan S. Diaz, Andrea NeyraNazarrett, Julian Ramirez, Raffaella Sadun, and Jorge A. Tamayo. All rights reserved. Short sections oftext, not to exceed two paragraphs, maybe quoted without explicit permission provided that full credit, including © notice, is given to the source. Training within Firms Brayan S. Diaz, Andrea Neyra Nazarrett, Julian Ramirez, Raffaella Sadun, and Jorge A. Tamayo NBER Working Paper No. 33670 April 2025 JEL No. J24, L23, M12, M53 ABSTRACT Training investments are essential for improving worker and firm productivity, yet their implementation is often hindered by low participation rates and insufficient worker engagement. This study uses data from three firms—a car manufacturer, a quick-service restaurant chain, and aretail company—to show that variation in training participation among employees is closely tied to differences in middle managers’ behavior and practices. Middle managers who actively engage with their employees and emphasize their well-being and development are associated with significantly higher participation in training programs. These managerial differences significantly influence employee performance and absenteeism, especially during periods of organizational change. Together, these findings underscore the importance of middle managers in bridging the gap between centrally designed HR policies and their effective on-the-ground execution. Brayan S. Diaz Harvard University [bsnehiderdiaz@hbs.edu](bsnehiderdiaz@hbs.edu) Andrea Neyra Nazarrett Harvard University [Aneyra@g.harvard.edu](Aneyra@g.harvard.edu) Julian Ramirez Harvard University [juliansantiagoramirez82@gmail.com](juliansantiagoramirez82@gmail.com) Raffaella Sadun Harvard Business School Morgan Hall 215 Soldiers Field Boston, MA 02163 and NBER [rsadun@hbs.edu](rsadun@hbs.edu) Jorge A. Tamayo Harvard Business School Soldiers Field Morgan Hall 292 Boston, MA 02163 [jtamayo@hbs.edu](jtamayo@hbs.edu) 1 Introduction Training is broadly recognized as essential for improving workers’ skills and productivity, firm performance and economic growth (Adhvaryu et al., 2023c,d ; Bartel, 1994, 1995 ; Becker, 1964 ; Dearden et al., 2006 ; Espinosa and Stanton, 2022 ; Konings and Vanormelingen, 2015) . Existing research has largely emphasized the role of labor market imperfections in shaping firms’ training investments (Acemoglu and Pischke, 1999 ; Leuven, 2005) . In contrast, far less attention has been devoted to understanding

FAQs

What main problem does the paper address regarding firm training?

Firm training investments are often hindered by low participation rates and inconsistent worker engagement, even when firms invest substantially.

How do middle managers influence training participation?

Middle managers who actively engage employees and emphasize well-being and development are associated with significantly higher participation in training programs.

What downstream effects does managerial behavior have?

Managerial differences affect employee performance and absenteeism, particularly during periods of organizational change.

Oct 13, 2026

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