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Market Imperfections and Firm-Sponsored Training

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  • Picchio, Matteo

    ()
    (Università Politecnica delle Marche, Ancona)

  • van Ours, Jan C.

    ()
    (Tilburg University)

Abstract

Recent human capital theories predict that labor market frictions and product market competition influence firm-sponsored training. Using matched worker-firm data from Dutch manufacturing, our paper empirically assesses the validity of these predictions. We find that a decrease in labor market frictions significantly reduces firms' training expenditures. Instead, product market competition does not have an effect on firm-sponsored training. We conclude that increasing competition through international integration and globalization does not pose a threat to investments in on-the-job training. An increase in labor market flexibility may reduce incentives of firms to invest in training, but the magnitude of this effect is small.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4988.

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Length: 25 pages
Date of creation: Jun 2010
Date of revision:
Publication status: published in: Labour Economics, 2011, 18 (5), 712-722
Handle: RePEc:iza:izadps:dp4988

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Keywords: matched worker-firm data; firm-sponsored training; labor market frictions; product market competition;

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References

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Cited by:
  1. Katja Görlitz & Joel Stiebale, 2011. "The Impact of Product Market Competition on Employers’ Training Investments. Evidence from German Establishment Panel Data," De Economist, Springer, vol. 159(1), pages 1-23, March.
  2. Jens Mohrenweiser & Thomas Zwick & Uschi Backes-Gellner, 2010. "Poaching And Firm Sponsored Training: First Clean Evidence," Economics of Education Working Paper Series, University of Zurich, Institute for Strategy and Business Economics (ISU) 0051, University of Zurich, Institute for Strategy and Business Economics (ISU), revised May 2013.
  3. Picchio, Matteo & van Ours, Jan C, 2011. "Retaining through training; even for older workers," CEPR Discussion Papers 8320, C.E.P.R. Discussion Papers.
  4. Ritzen, Jo & Zimmermann, Klaus F., 2013. "A Vibrant European Labor Market with Full Employment," IZA Policy Papers 73, Institute for the Study of Labor (IZA).
  5. Pontus Rendahl, 2013. "Equilibrium Contracts and Firm-sponsored Training," Cambridge Working Papers in Economics 1336, Faculty of Economics, University of Cambridge.

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