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Returns to On-the-Job Soft Skills Training

This study examines the impact of workplace-based soft skills training on the productivity of Indian garment workers. The study finds that such training leads to significant productivity gains, with treated workers becoming 13.5% more productive than their untreated counterparts. These gains are particularly pronounced when trainees work in teams alongside their coworkers, emphasizing the importance of teamwork and collaboration skills. Interestingly, even untreated coworkers on the same production lines as the trained workers show increased productivity, suggesting positive spillover effects. However, despite the productivity improvements and higher promotion probabilities among trained workers, the study finds no effects on wages or worker retention, indicating labor market frictions. Nevertheless, the firm experiences substantial net returns, with a 256% return on investment eight months after program completion. This research contributes to the understanding of the value of soft skills in the labor market and highlights the significance of teamwork and collaboration skills, particularly in a manufacturing context. It also sheds light on the challenges firms face in retaining trained workers in the presence of labor market frictions, especially in low-income settings.