AbstractThis Paper introduces two complementary models of firm-specific training: an informational model and a productivity-enhancement model. In both models, market provision of firm-specific training is inefficient. The nature of the inefficiency depends, however, on the balance between the two key components of training, namely productivity enhancement and employee evaluation. In the informational model, training results in a proportionate increase in productivity enhancement and employee evaluation, and training is underprovided by the market. In the productivity-enhancement model, training results in an increase in productivity enhancement but no change in employee evaluation, and training is overprovided by the market. In both models, turnover is inefficiently low.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4580.
Date of creation: Aug 2004
Date of revision:
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Other versions of this item:
- Leonardo Felli & Christopher Harris, 2004. "Firm-Specific Training," Economics Working Papers 0038, Institute for Advanced Study, School of Social Science.
- Leonardo Felli & Christopher Harris, 2005. "Firm-Specific Training," Levine's Bibliography 122247000000000839, UCLA Department of Economics.
- Christopher Harris & Leonardo Felli, 2004. "Firm-Specific Training," 2004 Meeting Papers 62, Society for Economic Dynamics.
- Leonardo Felli & Christopher Harris, 2004. "Firm-Specific Training," STICERD - Theoretical Economics Paper Series /2004/473, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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