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Worker Reciprocity and Employer Investment in Training

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Author Info

  • Edwin Leuven

    ()
    (University of Amsterdam)

  • Hessel Oosterbeek

    ()
    (University of Amsterdam)

  • Randolph Sloof

    ()
    (University of Amsterdam)

  • Chris van Klaveren

    (University of Amsterdam)

Abstract

Standard economic theory predicts that firms will not invest in general training and will underinvest in specific training. Empirical evidence, however, indicates that firms do invest in general training of their workers. Evidence from laboratory experiments points to less underinvestment in specific training than theory predicts. We propose a simple model in which a firm invests the socially optimal amounts in general and specific training if the worker is sufficiently motivated by reciprocity. A reciprocal worker may be willing to give the firm a full return on its investment. We present empirical evidence that supports the proposed mechanism. Workers with a high sensitivity to reciprocity have 15% higher training rates than workers with a low sensitivity to reciprocity. See publication in Economica , 2005, 72(285), 137-149.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 02-090/3.

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Date of creation: 23 Sep 2002
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Handle: RePEc:dgr:uvatin:20020090

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Web page: http://www.tinbergen.nl

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Keywords: Training; Reciprocity;

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Cited by:
  1. Florian Englmaier & Stephen G. Leider, 2012. "Managerial Payoff and Gift Exchange in the Field," CESifo Working Paper Series 3707, CESifo Group Munich.
  2. Sascha O. Becker & Dolores Messer & Stefan C. Wolter, 2011. "A Gift is not Always a Gift: Gift Exchange in a Voucher Experiment," CESifo Working Paper Series 3488, CESifo Group Munich.
  3. Nadège Marchand & Claude Montmarquette, 2008. "Training Without Certification: An Experimental Study," CIRANO Working Papers, CIRANO 2008s-01, CIRANO.
  4. Gerards Ruud & Grip Andries de & Witlox Maaike, 2012. "Employability-miles and worker employability awareness," ROA Research Memorandum, Maastricht University, Research Centre for Education and the Labour Market (ROA) 010, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  5. Florian Englmaier & Stephen G. Leider, 2008. "Contractual and Organizational Structurewith Reciprocal Agents," CESifo Working Paper Series 2415, CESifo Group Munich.
  6. Rita Asplund, 2005. "The Provision and Effects of Company Training: A Brief Review of the Literature," Nordic Journal of Political Economy, Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 47-73.
  7. Asplund, Rita, 2004. "The Provision and Effects of Company Training. A brief review of the literature," Discussion Papers, The Research Institute of the Finnish Economy 907, The Research Institute of the Finnish Economy.
  8. Bilanakos, Christos, 2013. "Career concerns and firm – sponsored general training," Research in Economics, Elsevier, Elsevier, vol. 67(2), pages 117-132.
  9. Gerald Pruckner & Rupert Sausgruber, 2006. "A natural field experiment on newspaper purchasing," Natural Field Experiments, The Field Experiments Website 00320, The Field Experiments Website.

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