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On the Incidence of Employment Subsidies to Vocational Training

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  • Karsten Albæk

    (Department of Economics, University of Copenhagen)

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    Abstract

    The present paper analyses employment subsidies to vocational training under union wage bargaining. The analysis includes an investigation of the consequences of financing the subsidy by a levy on employment, which is the typical way of financing these types of subsidies in many countries. The paper demonstrates high incidence rates of subsidies to vocational training under standard assumptions about the preference structure of the union. The financing scheme appears to counteract the purpose of the subsidy.

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    File URL: http://www.econ.ku.dk/cam/wp0910/2010-02.pdf/
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    Bibliographic Info

    Paper provided by University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics in its series CAM Working Papers with number 2010-02.

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    Length: 10 pages
    Date of creation: Feb 2010
    Date of revision:
    Handle: RePEc:kud:kuieca:2010_02

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    1. Acemoglu, Daron & Pischke, Jörn-Steffen, 1996. "Why do Firms Train? Theory and Evidence," CEPR Discussion Papers 1460, C.E.P.R. Discussion Papers.
    2. Farber, Henry S, 1978. "Individual Preferences and Union Wage Determination: The Case of the United Mine Workers," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 923-42, October.
    3. Stevens, M., 1999. "Should Firms be Required to Pay for Vocational Training?," Economics Papers 1999-w4, Economics Group, Nuffield College, University of Oxford.
    4. Malcomson, James M. & Maw, James W. & McCormick, Barry, 2000. "General training by firms, apprentice contracts, and public policy," Discussion Paper Series In Economics And Econometrics 0021, Economics Division, School of Social Sciences, University of Southampton.
    5. Dustmann, Christian & Schönberg, Uta, 2004. "Training and Union Wages," IZA Discussion Papers 1435, Institute for the Study of Labor (IZA).
    6. Booth,Alison L., 1994. "The Economics of the Trade Union," Cambridge Books, Cambridge University Press, number 9780521468398.
    7. MaCurdy, Thomas E & Pencavel, John H, 1986. "Testing between Competing Models of Wage and Employment Determination in Unionized Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S3-S39, June.
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