Shared investment in general training : the role of information
AbstractThe major premise of this paper is that potential recruiters do not possess much information on the extent and type of workers'on-the-job-training. Workers taken for trained might turn out to possess no, or very little, general training. Also, a worker recruited for a given job may possess the wrong type of general training. All this imposes substantial information-based costs on firms that recruit rather than train. These costs include opportunity costs, actual expenses and increased exposure to risk. As a result, a recruiting firm will offer lower wages and place a lower value on a recruited worker with general training than the firm that trained him.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 535.
Date of creation: 30 Nov 1990
Date of revision:
Tertiary Education; Primary Education; Labor Standards; Teaching and Learning; ICT Policy and Strategies;
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- Maria De Paola & Vincenzo Scoppa, 2002. "Firms' Training Decisions and Unemployment in Italian Labour Markets," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 61(1), pages 103-126, June.
- 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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