Employer Beliefs, Employee Training, and Labor Market Outcomes: A Field Experiment in Uganda

Small firms in developing countries are commonly engaged in highly-technical, capital-intensive industries. These industries are subject to well-established inefficiencies exacerbated by a lack of technical knowledge and an under-provision of employee training. Information and behavioral barriers are likely to be critical in inhibiting firm owners from investing optimally in worker technical skills training. We propose a randomized evaluation of a vocational education intervention targeting the production process of small metalworking firms in Kampala, Uganda. This intervention will be implemented by Makerere University and will provide technical skills training designed to increase productivity of workers. We will measure the impact of training on both worker outcomes (learning, wages, turnover) and firm outcomes (productivity, profits, and job creation). In addition, we will conduct novel, incentive-compatible belief- and preference-elicitations for owners and workers. These elicitations will uncover behavioral and information failures that inhibit firms owners from investing optimally in worker technical skills training.