The project researches the contribution of factory-based training institutions in promoting industrial productivity growth. This project takes a novel approach to evaluating the effect of on-the-job training on workplace productivity by analyzing the effects of workplace training and education in a primarily illiterate adult population. Since most existing analyses study the effects of training in comparatively well-educated populations, they are of only limited relevance to policymakers in the world's poorest countries, where the inadequacy of educational institutions leaves many working adults with little or no education. Such gross educational deficiency is widely believed to limit workplace productivity in developing countries. Although the provision of education to the school age population is a crucial policy measure which promises to provide economic benefits to future generations, it provides no immediate help to uneducated adults who have matured beyond school age. For uneducated adults, part-time programs may provide the only feasible method of acquiring basic literacy and vocational skills. While all education is probably of some benefit to productivity, factory-based educational programs have the potential to provide industry- and firm-specific skills which could not be easily incorporated into remedial education in other settings. If basic education and vocational skills have complementary effects on workplace productivity, then factory-based education may have a larger impact on industrial performance than similar programs conducted in other settings. Since provision of adult education is costly and resources are limited, identifying particularly effective forms is crucial to the design of educational policies for developing countries. The project makes use of data from The Shanghai Industrial Census to study the expansion of work-based education carried out in Shanghai between 1949 and 1957. Econometric analysis is used to investigate whether these programs affected productivity within the enterprises in which they were implemented. Productivity effects of the educational programs applied are compared also across industrial sectors and across state-run and private sectors that loomed large in the Shanghai economy. Analysis of this census is linked to monthly production and training statistics from government-owned textile firms operating between 1946 and 1949. The precedents for the 1940s and 1950s expansion of factory-based education are traced to workplace practices of Japanese-owned enterprises which operated in China during the 1920s and 1930s. Innovative training programs carried out in these enterprises contributed to the success of Japanese investments in the Chinese textile sector. After World War II, Japanese-owned enterprises were nationalized and these training programs were adopted and expanded by the Nationalist and Communist governments. A historical analysis of these programs traces the influence of private sector training on the provision of education to adult workers in Chinese state-owned firms during the 1950s. The project thus sheds light on both the productivity effects of workplace educational institutions, and on the role of the private and public sectors in developing, diffusing, and implementing these programs.
