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The interaction of firing costs and firm training

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  • Wolfgang Lechthaler

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Abstract

This paper analyzes the effects of firing costs in a broader setup than what is usually done, allowing for on-the-job training. By doing so the traditional analysis is extended with respect to two points: On the one hand firing costs clearly increase firm training because worker and firm are less likely to separate. On the other hand, firm training gives firms the opportunity to lower the costs of firing restrictions: After all the value of output of a well-trained worker is less likely to turn negative. Through these two channels firm training is able to diminish the negative effects of firing restrictions usually discussed in the literature.

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File URL: http://hdl.handle.net/10.1007/s10663-008-9088-x
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Bibliographic Info

Article provided by Springer in its journal Empirica.

Volume (Year): 36 (2009)
Issue (Month): 3 (August)
Pages: 331-350

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Handle: RePEc:kap:empiri:v:36:y:2009:i:3:p:331-350

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Web page: http://www.springerlink.com/link.asp?id=100261

Related research

Keywords: Firm training; Firing costs; Human capital; E24; J24; J63; J68; M53;

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References

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Citations

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Cited by:
  1. Pierre-Jean Messe & Bénédicte Rouland, 2012. "Stricter employment protection and firms' incentives to train: The case of French older workers," Working Papers halshs-00856132, HAL.
  2. Wolfgang Lechthaler & Dennis J. Snower, 2007. "Institutions and Training Inequality," Kiel Working Papers 1372, Kiel Institute for the World Economy.

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