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Worker‐financed versus Firm‐sponsored Training: How are Skilled Workers Supplied to the Economy?

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  • NAOKI SHINTOYO

Abstract

A search and matching model of general human capital is developed to contrast worker‐financed training with firm‐sponsored training, to evaluate which type of training might prevail in the economy. It will be shown that firm‐sponsored training is more likely to occur when there is greater friction in the labour market, whereas worker‐financed training prevails in a less frictional market. Moreover, the model has multiple equilibria in labour markets with intermediate friction. Comparative statistics exercises tell us that reductions in labour market friction result in less firm‐sponsored training in the economy, but encourage worker‐financed training.

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  • Naoki Shintoyo, 2010. "Worker‐financed versus Firm‐sponsored Training: How are Skilled Workers Supplied to the Economy?," Economica, London School of Economics and Political Science, vol. 77(305), pages 110-127, January.
    • Handle: RePEc:bla:econom:v:77:y:2010:i:305:p:110-127
    DOI: 10.1111/j.1468-0335.2008.00737.x
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    Cited by:

    1. Emanuele Bacchiega & Antonio Minniti, 2015. "Training and Product Quality in Unionized Oligopolies," Economica, London School of Economics and Political Science, vol. 82, pages 1261-1301, December.
    2. Naoki Shintoyo, 2023. "Labor Market Flexibility and General and Firm-specific Skills," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 51(4), pages 275-286, December.

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