Workplace training produces 2 types of human capital: general and firm-specific. Based on specific human capital theories pioneered by Gary Becker, this article empirically examines the impact of on-the-job training and off-the-job training on wage levels in urban China. It is found that off-the-job training in previous firms significantly raises wages at a worker's current firm, whereas previous on-the-job training has no effect on current wages. The results are consistent with theory and U.S. experience. The results are robust to various specifications and procedures correcting for potential error clustering and selection bias problems. It is suggested that advocating firm and government cosponsored general training programs targeting disadvantaged urban populations is a desirable and feasible strategy in an attempt to relieve the increasing unemployment pressure in China.
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