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On-the-Job Specific Training and Efficient Screening

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Author Info
Bac, Mehmet

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Abstract

Employment relationships are governed by short-term incomplete contracts and typically involve on-the-job screening and firm-specific training. This article studies a dynamic employment relationship with these features and identifies a potential conflict between the employer's twin objectives to screen and train the worker: when the training technology is quite productive, the employer may have to sacrifice from worker performance during the screening process. The article thus offers an explanation for why firms may invest suboptimally on training, which complements the standard "inappropriable rents" explanation based on ex post mobility of young employees. Copyright 2000 by University of Chicago Press.

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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 18 (2000)
Issue (Month): 4 (October)
Pages: 681-701
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Handle: RePEc:ucp:jlabec:v:18:y:2000:i:4:p:681-701

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  1. Mehmet Bac & Serife Genc, 2009. "The French first employment contract: efficient screening device or Kleenex contract?," Journal of Economics, Springer, vol. 98(1), pages 77-88, September. [Downloadable!] (restricted)
  2. Pinoli, Sara, 2008. "Screening ex-ante or screening on-the-job? The impact of the employment contract," MPRA Paper 11429, University Library of Munich, Germany. [Downloadable!]
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