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Firm-Provided Training and Labor Market Policies

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  • Felipe Balmaceda

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Abstract

This paper studies firm-provided training in the presence of the following labor market policies: minimum wages, unemployment benefits, firing costs, and severance payments. I show that in high minimum wage economies, a more intense use of labor market policies reduces firm-provide training, while in low minimum wage economies, this may result in more training. The results of the paper are used to shed light on the relationship between the skill-premium and labor-market policies. In particular, I show that the skill premium is non-decreasing in the strictness of employment-protection legislation and non-increasing with the minimum wage and unemployment benefits.

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Bibliographic Info

Paper provided by Centro de Economía Aplicada, Universidad de Chile in its series Documentos de Trabajo with number 252.

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Date of creation: 2008
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Handle: RePEc:edj:ceauch:252

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  1. Daron Acemoglu & Jorn-Steffen Pischke, 1998. "Beyond Becker: Training in Imperfect Labor Markets," NBER Working Papers 6740, National Bureau of Economic Research, Inc.
  2. Wolfgang Lechthaler & Dennis J. Snower, 2006. "Minimum Wages and Firm Training," Kiel Working Papers 1298, Kiel Institute for the World Economy.
  3. Pierre, Gaelle & Scarpetta, Stefano, 2004. "Employment regulations through the eyes of employers - do they matter and how do firms respond to them?," Policy Research Working Paper Series 3463, The World Bank.
  4. Arulampalam, Wiji & Alison L Booth & Mark L Bryan, 2003. "Work-related Training and the New National Minimum Wage in Britain," Royal Economic Society Annual Conference 2003 9, Royal Economic Society.
  5. Felipe Balmaceda, 2005. "Firm-Sponsored General Training," Journal of Labor Economics, University of Chicago Press, vol. 23(1), pages 115-134, January.
  6. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
  7. Acemoglu, Daron & Pischke, Jörn-Steffen, 1996. "Why do Firms Train? Theory and Evidence," CEPR Discussion Papers 1460, C.E.P.R. Discussion Papers.
  8. David Neumark & Mark Schweitzer & William Wascher, 2000. "The Effects of Minimum Wages Throughout the Wage Distribution," NBER Working Papers 7519, National Bureau of Economic Research, Inc.
  9. Amanda Gosling & Thomas Lemieux, 2001. "Labour Market Reforms and Changes in Wage Inequality in the United Kingdom and the United States," NBER Working Papers 8413, National Bureau of Economic Research, Inc.
  10. Adam J. Grossberg & Paul Sicilian, 1999. "Minimum Wages, On-the-Job Training, and Wage Growth," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 539-556, January.
  11. Agell, Jonas & Lommerud, Kjell Erik, 1997. "Minimum wages and the incentives for skill formation," Journal of Public Economics, Elsevier, vol. 64(1), pages 25-40, April.
  12. Felipe Balmaceda, . "Firm-Sponsored General Training in a Frictionless Labor Market," ILADES-Georgetown University Working Papers inv134, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
  13. Thomas Lemieux, 2006. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?," American Economic Review, American Economic Association, vol. 96(3), pages 461-498, June.
  14. Fella, Giulio, 2005. "Termination restrictions and investment in general training," European Economic Review, Elsevier, vol. 49(6), pages 1479-1499, August.
  15. MacLeod, W. Bentley & Malcomson, James M., 1993. "Specific investment and wage profiles in labour markets," European Economic Review, Elsevier, vol. 37(2-3), pages 343-354, April.
  16. Felipe Balmaceda, 2006. "Task-Specific Training and Job Design," Documentos de Trabajo 223, Centro de Economía Aplicada, Universidad de Chile.
  17. Alvarez, Fernando & Veracierto, Marcelo, 2001. "Severance payments in an economy with frictions," Journal of Monetary Economics, Elsevier, vol. 47(3), pages 477-498, June.
  18. David Card & Richard Blundell & Richard B. Freeman, 2004. "Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000," NBER Books, National Bureau of Economic Research, Inc, number card04-1.
  19. David De Meza & Ben Lockwood, 1998. "Does Asset Ownership Always Motivate Managers? Outside Options And The Property Rights Theory Of The Firm," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 361-386, May.
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  21. David Neumark & William L. Wascher, 2008. "Minimum Wages," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262141027, January.
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  23. Hopenhayn, Hugo & Rogerson, Richard, 1993. "Job Turnover and Policy Evaluation: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 915-38, October.
  24. Acemoglu, Daron & Pischke, Jörn-Steffen, 1998. "The Structure of Wages and Investment in General Training," CEPR Discussion Papers 1833, C.E.P.R. Discussion Papers.
  25. Nickell, S. & Layard, R., 1997. "Labour Market Institutions and Economic Performance," Papers 23, Centre for Economic Performance & Institute of Economics.
  26. Daron Acemoglu & Jorn-Steffen Pischke, 2002. "Minimum wages and on-the-job training," LSE Research Online Documents on Economics 20084, London School of Economics and Political Science, LSE Library.
  27. David S. Lee, 1999. "WAGE INEQUALITY IN THE UNITED STATES DURING THE 1980s: RISING DISPERSION OR FALLING MINIMUM WAGE?," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 977-1023, August.
  28. Booth, Alison L. & Zoega, Gylfi, 2003. "On the welfare implications of firing costs," European Journal of Political Economy, Elsevier, vol. 19(4), pages 759-775, November.
  29. Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2004. "Training and the new minimum wage," Economic Journal, Royal Economic Society, vol. 114(494), pages C87-C94, 03.
  30. Teulings,Coen & Hartog,Joop, 2008. "Corporatism or Competition?," Cambridge Books, Cambridge University Press, number 9780521049399, December.
  31. Loewenstein, Mark A & Spletzer, James R, 1998. "Dividing the Costs and Returns to General Training," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 142-71, January.
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Cited by:
  1. Christos Bilanakos, 2011. "Career Concerns and Firm – Sponsored General Training," University of Cyprus Working Papers in Economics 07-2011, University of Cyprus Department of Economics.

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