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Is Wage Compression a Necessary Condition for Firm-Financed General Training?

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  • Booth, Alison L
  • Zoega, Gylfi

Abstract

It is well known that workers in Europe appear to receive more firm-provided general training than their counterparts in the United States. Moreover, there is considerable evidence that firms, in many cases, pay for the general training, contrary to the predictions of Becker (1964). In important recent contributions, Acemoglu and Pischke argue that it is through wage compression that unions and other labour-market institutions induce firms to invest in general training. We show that while wage compression can make firms more willing to pay for training, it does not constitute a necessary condition for firm-sponsored training.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2845.

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Date of creation: Jun 2001
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Handle: RePEc:cpr:ceprdp:2845

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Keywords: absolute- and relative wage compression; Firm-financed general training;

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  1. Daron Acemoglu & Jorn-Steffen Pischke, 1998. "The Structure of Wages and Investment in General Training," NBER Working Papers 6357, National Bureau of Economic Research, Inc.
  2. Daron Acemoglu & Joern-Steffen Pischke, 1998. "Beyond Becker: Training in Imperfect Labor Markets," Working papers 98-12, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. repec:eme:rlepps:v:18:y:1999:i:1999:p:303-330 is not listed on IDEAS
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