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Provision of firm-sponsored training to temporary workers and labor market performance

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  • Masui, Makoto

Abstract

This paper addresses an employer’s decision to invest in firm-specific training for temporary workers within a search-matching framework with two-tier employment contracts. Based on the fact that opportunities to receive firm-provided training are significantly limited in temporary jobs, we examine whether policies aimed at inducing employers to provide training for temporary workers improve labor market performance. Our quantitative analysis produces the following results: first, reducing the cost of training temporary workers, which aims to directly increase their participation in firm-provided training, improves social efficiency but increases the unemployment rate, and decreases the share of permanent workers. Second, relaxing firing regulations on permanent jobs decreases the unemployment rate and increases the proportion of temporary workers who receive training and social welfare. Thus, a spillover effect of reforming employment protection legislation associated with permanent jobs is observed on training provision in temporary jobs.

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  • Masui, Makoto, 2023. "Provision of firm-sponsored training to temporary workers and labor market performance," Macroeconomic Dynamics, Cambridge University Press, vol. 27(4), pages 966-997, June.
    • Handle: RePEc:cup:macdyn:v:27:y:2023:i:4:p:966-997_5
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    Cited by:

    1. Shisham Adhikari & Athanasios Geromichalos & Ates Gursoy & Ioannis Kospentaris, 2025. "How much work experience do you need to get your first job?: The macroeconomic implications of bias against labor market entrants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 58, October.

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