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Market imperfections and firm-sponsored training

  • Picchio, Matteo
  • van Ours, Jan C.

Using worker and firm data from Dutch manufacturing, our paper investigates how product market competition and labor market imperfections affect firm-sponsored training. We find that product market competition does not affect the firms' training expenditures. Increasing competition, for instance due to increased international integration and globalization, is not a threat to investments in on-the-job training. Instead, labor market imperfections influence firm-sponsored training. An increase in labor market flexibility significantly reduces the incentives of firms to invest in training. The magnitude of this effect is nevertheless small.

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Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 18 (2011)
Issue (Month): 5 (October)
Pages: 712-722

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Handle: RePEc:eee:labeco:v:18:y:2011:i:5:p:712-722
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