Job satisfaction and employer‐sponsored training
| Published date | 01 December 2023 |
| Author | Vasilios D. Kosteas |
| Date | 01 December 2023 |
| DOI | http://doi.org/10.1111/bjir.12741 |
Received: 8 July 2022 Accepted: 2 March 2023
DOI: 10.1111/bj ir.12741
ORIGINAL ARTICLE
Job satisfaction and employer-sponsored
training
Vasilios D. Kosteas
Department of Economics, Cleveland
State University, Cleveland, Ohio, USA
Correspondence
Vasilios D.Kosteas, Cleveland State
University.
Email: b.kosteas@csuohio.edu
This research did not receive any specific
grant from funding agencies in the public,
commercial or not-for-profit sectors.
Abstract
This article examines whether participation in
employer-sponsored training has a causal impact
on job satisfaction by accounting for individual fixed
effects, individual-by-employer fixed effects and con-
trolling for promotions in a sub-sample of the data to
address the endogeneity of participation arising from
within employer job changes. The estimates show a
consistent, positive effect of participation in employer-
sponsored training on job satisfaction. Conversely,
participation in other types of training does not have a
significant impact upon job satisfaction. Additionally,
participation in employer-sponsored training has a
strong, negative correlation with turnover even while
controlling for job satisfaction. Training does not exhibit
a lasting effect of either job satisfaction or turnover.
1 INTRODUCTION
Greater job satisfaction is associated with a reduction in severalnegative job behaviours, including
quits (Akerlof et al., 1988;Clark,2001; Freeman, 1978; McEvoy & Cascio, 1985; Pergamit & Veum,
1999; Shields & Ward, 2001; Sousa-Poza& Sousa-Poza, 2007) and absenteeism (Clegg, 1983;Wegge
et al., 2007) and positively related to worker productivity (Judge et al., 2001; Mangione & Quinn,
1975). As such, employers would be keen to foster a high degree of job satisfaction. For this and
other reasons, researchers have devoted considerableeffort to understanding what factors impact
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© 2023 The Authors. British Journal of Industrial Relationspublished by John Wiley & Sons Ltd.
Br J Ind Relat. 2023;61:771–795. wileyonlinelibrary.com/journal/bjir 771
772 BRITISH JOURNAL OF INDUSTRIAL RELATIONS
job satisfaction. Broadly, these can be classified into intrinsic (features of the job/employment
relationship) and extrinsic (salary, benefits, etc.) factors.
A key intrinsic job characteristic is employer-provided training. Traditional economic theory
predicts that workers will pay the cost of general training (where the skills developed transfer to
other employers) through lower starting wages and receive benefits in the form of higher wages
in the future. Conversely, employers and workers split the cost of firm-specific training (where
the skills do not transfer to other employers) and share in the returns. Evidence regarding the
predictions on general training are at best mixed. While research has shown that workersdo ‘pay’
for training in the form of lower starting wages (Barron et al., 1999), the reduction is often small
and there is evidence that firms pay at least some of the costs of general training, including tuition
reimbursement for college courses (Cappelli, 2004). Rather,f irms appear to use tuition benefits as
a means of attracting and retaining higher-quality employees (Cappelli, 2004). Additionally, the
literature has moved awayfrom the simple firm-specif ic versus generalhuman capital dichotomy
and considers occupation and industry-specific in addition to firm-specific human capital (Sulli-
van, 2010) with some studies emphasizing the task content of jobs (Gibbons & Waldman, 2004;
Lazear, 2009). Moreover, specificity is not an either-or proposition. Rather, skills can vary in the
degree to which they are employed in specific jobs within and across organizations. Since most
training events are likely to develop skills and knowledge that are at least somewhat portable to
other employers and potentially across industries and occupations, why do firms pay for train-
ing? Cappelli (2004) provides a partial explanation. Training may be linked to lower turnover. I
hypothesize this link works through increased job satisfaction, which is known to reduce worker
turnover.
The present study begins with an examination of the link between employer-sponsored train-
ing and job satisfaction in a broad sample of US workers. The study contributes to the existing
literature by accounting for unobserved worker characteristics, employer characteristics and the
endogeneity of training provision and enrolment, especially with respect to within-employer job
changes, to isolate the causal effect of participation on employer-sponsored training on job satis-
faction. Previous studies have accounted for one or two of these factors, but not all three together
(Burgard & Gorlitz, 2014;D’Addio et al., 2007; Georgellis & Lange, 2007; Pagan-Rodriguez, 2015).
The psychology literature has developed several theoretical models to explain variation in job
satisfaction, including the dispositional approach (Judge et al., 1997), the job characteristics model
(Hackman & Oldham, 1976) and the job demands-resources model (Demerouti et al., 2001). The
dispositional approach posits that individuals’ core evaluations, assessments of themselves and
the world around them affect their perceptions of work characteristics, job satisfaction and overall
life satisfaction. Empirical research has subsequently shown that self-esteem, self-efficacy, locus
of control and neuroticism are strongly associated with job satisfaction (Judge & Bono, 2001).
The job characteristics model predicts that job features, such as skill variety, task identity, task
significance and autonomy, lead to greater job satisfaction. Subsequent empirical research has
supported this model’s predictions (Fried & Ferris, 1987). The job characteristics model relates
to the concept of compensating differentials in the labour economics literature, where positive
job attributes are valued by workers who are willing to trade-off monetary compensation for bet-
ter work characteristics. Meanwhile, the job demands-resources model, which was developed to
explain workerburnout, categorizes job features into job demands and resources. Jobdemands are
those aspects of the job that require sustained effort (either mental or physical), while resources
assist in job performance, reduce demands and support worker development. Excess job demands
lead to exhaustion, while insufficient resources can result in disengagement; together,the two can
result in burnout.
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