Firm Training and Wage Rigidity

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Firm Training and Wage Rigidity

Author Info

Wolfgang Lechthaler

Abstract

Although wage rigidity is among the most prominent subjects in modern economics, its effects on wage compression and firm training have thus far not been considered. This paper is trying to bridge this gap by using a simple two period model which can still by analyzed analytically. I am able to show that wage rigidity increases wage compression. However, contrary to previous work this is not sufficient to increase firms' training investments. The reason lies in the endogeneity of separations, which become more frequent

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Publisher Info
Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1452.

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Length: 37 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:kie:kieliw:1452

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Find related papers by JEL classification:
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
M53 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Training

This paper has been announced in the following NEP Reports:

NEP-ALL-2008-10-13 (All new papers)
NEP-BEC-2008-10-13 (Business Economics)
NEP-HRM-2008-10-13 (Human Capital & Human Resource Management)
NEP-LAB-2008-10-13 (Labour Economics)

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This page was last updated on 2009-11-24.

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