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On-the-job training, firm resources and unemployment risks: an analysis of the Swedish recession 1991-1993

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  • le Grand, Carl

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    (IFAU - Office of Labour Market Policy Evaluation)

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    Abstract

    Two general questions are posed in this paper: (a) In what ways do characteristics of the firm where the worker is employed have an influence on the worker's risk to become unemployed? (b) How do general and specific skills acquired in the firm affect the worker's unemployment risk? The empirical analyses are based on three matched data sets: (i) survey data from the 1991 Swedish Level of Living Survey on individual and job related characteristics of the employees; (ii) register data on annual economic reports of private firms; and (iii) register data from the National Labor Market Board on registered unemployment. The main findings are: First, the resources and economic situation of the firm affect the workers' risks of becoming unemployed in several ways: The risks are larger for workers employed in small-scale firms, in labor intensive firms, in firms with small or negative profits, and/or in firms with a high debt to equity ratio. Moreover, these firm-level effects do not seem to be explained by the selection of productive, high capacity workers to resourceful, capital intensive and productive firms. Second, the effect on unemployment risks of the acquisition of skills within the firm is conditioned by the degree of transferability of such skills to other firms. A worker with skills that are firm specific will not be better off than a worker with relatively low job skills, while a worker with skills that can be of use with other employers has much less unemployment risks.

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    Bibliographic Info

    Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2000:3.

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    Length: 32 pages
    Date of creation: 17 May 2000
    Date of revision:
    Handle: RePEc:hhs:ifauwp:2000_003

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    Postal: IFAU, P O Box 513, SE-751 20 Uppsala, Sweden
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    Related research

    Keywords: Unemployment risks; firm;

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    1. Andrew Oswald, 1984. "Efficient Contracts are on the Labour Demand Curve: Theory and Facts," Working Papers 555, Princeton University, Department of Economics, Industrial Relations Section..
    2. 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.
    3. Mahmood Arai, 2003. "Wages, Profits, and Capital Intensity: Evidence from Matched Worker-Firm Data," Journal of Labor Economics, University of Chicago Press, vol. 21(3), pages 593-618, July.
    4. Andersson, Fredrik, 1999. "Job flows in Swedish manufacturing 1972-1996," Working Paper Series 1999:4, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    5. Akerlof, George A & Yellen, Janet L, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 255-83, May.
    6. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, December.
    7. Joshua Angrist & Alan Krueger, 1998. "Empirical Strategies in Labor Economics," Working papers 98-7, Massachusetts Institute of Technology (MIT), Department of Economics.
    8. Bergström, Pål & Lindberg, Sara, 1998. "Firms' Financial Policy and Labour Demand: Theory and Evidence," Working Paper Series 1998:18, Uppsala University, Department of Economics.
    9. Bergstrom, P. & Lindberg, S., 1998. "Firms' Financial Policy and Labour Demand: Theory and Evidence," Papers 1998:18, Uppsala - Working Paper Series.
    10. Charles Brown & James L. Medoff, 1989. "The Employer Size-Wage Effect," NBER Working Papers 2870, National Bureau of Economic Research, Inc.
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