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The effects of wage compression on general and firm-specific training

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  • Thomas Ericson

Abstract

The issue of who finances on-the-job training has important implications for labour markets. It is persistently difficult to test empirically whether it is the employer or the employee who carries the costs of general training. This article presents a simple method that compares the effect of wage inequality on duration of general training and firm-specific training. The result is consistent with the proposition that it is the worker who bears a greater part of the costs associated with general training than in the case of firm-specific training.

Suggested Citation

  • Thomas Ericson, 2007. "The effects of wage compression on general and firm-specific training," Applied Economics Letters, Taylor & Francis Journals, vol. 15(3), pages 165-169.
    • Handle: RePEc:taf:apeclt:v:15:y:2007:i:3:p:165-169
    DOI: 10.1080/13504850600722054
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    References listed on IDEAS

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    1. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June.
    2. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Pfeifer, Christian, 2013. "Intra-firm Wage Compression and Cost Coverage of Training: Evidence from Linked Employer-Employee Data," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80030, Verein für Socialpolitik / German Economic Association.

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