Matching, Screening and Firm Investment in General Training: Theory and Evidence
AbstractWhen job matching is important, we show that firms will pay for general training under very weak conditions. The key ingredient in our model is the idea that it is more costly to screen skilled workers than it is to screen unskilled ones. In equilibrium, this 'softens' competition for trained workers, allowing firms to recoup training investments. We apply our model to a classic case of firm investment in general training - German Apprenticeship Training - and show that a key prediction of our model that is not shared by other models is strongly supported in the data.
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Bibliographic InfoPaper provided by International Conferences on Panel Data in its series 10th International Conference on Panel Data, Berlin, July 5-6, 2002 with number A2-4.
Date of creation: Apr 2002
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General Training; Human Capital; Auctions; Wages;
Find related papers by JEL classification:
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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