IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Institutions and training inequality

  • Lechthaler, Wolfgang
  • Snower, Dennis J.

We analyze how firm-provided training is affected by the interaction among important institutional variables in the labor market: firing costs, minimum wages and unemployment benefits. We find that the degree of complementarity and substitutability among these variables depends on employees' abilities. Thereby the institutional interactions influence skill inequality. We derive how the influence of one of the institutional variables above is affected by other institutional variables with respect to inequality in skills arising from firm-provided training. We derive several striking results, such as: (a) the minimum wage and unemployment benefits generate increasing skill inequality whereas firing costs generate skill equalization; (b) unemployment benefits and firing costs are complements in their effects on skill inequality, (c) firing costs and the minimum wage are substitutes in their effects on skill equalization, and (d) unemployment benefits and the minimum wage are substitutes in their effects on skill inequality.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0176268011000978
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 28 (2012)
Issue (Month): 1 ()
Pages: 88-104

as
in new window

Handle: RePEc:eee:poleco:v:28:y:2012:i:1:p:88-104
DOI: 10.1016/j.ejpoleco.2011.09.004
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505544

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Jonathan R. Veum, 1995. "Sources of Training and Their Impact on Wages," ILR Review, Cornell University, ILR School, vol. 48(4), pages 812-826, July.
  2. Dennis J. Snower & David T. Coe, 1996. "Policy Complementarities; The Case for Fundamental Labor Market Reform," IMF Working Papers 96/93, International Monetary Fund.
  3. repec:hhs:iuiwop:500 is not listed on IDEAS
  4. Acemoglu, D. & Pischke, J.S., 1997. "The Structure of Wages and Investment in General Training," Working papers 97-24, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Orszag, Mike & Snower, Dennis J., 1998. "Anatomy of policy complementarities," Open Access Publications from Kiel Institute for the World Economy 2252, Kiel Institute for the World Economy (IfW).
  6. Adam J. Grossberg & Paul Sicilian, 1999. "Minimum Wages, On-the-Job Training, and Wage Growth," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 539-556, January.
  7. Barro, Robert J., 1977. "Long-term contracting, sticky prices, and monetary policy," Journal of Monetary Economics, Elsevier, vol. 3(3), pages 305-316, July.
  8. Green, Francis, 1993. "The Determinants of Training of Male and Female Employees in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(1), pages 103-22, February.
  9. Daron Acemoglu & Jorn-Steffen Pischke, 2002. "Minimum wages and on-the-job training," LSE Research Online Documents on Economics 20084, London School of Economics and Political Science, LSE Library.
  10. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-44, September.
  11. Wolfgang Lechthaler, 2006. "The Interaction of Firing Costs and Firm Training," University of St. Gallen Department of Economics working paper series 2006 2006-01, Department of Economics, University of St. Gallen.
  12. Dale T. Mortensen & Christopher A. Pissarides, 1993. "Job Creation and Job Destruction in the Theory of Unemployment," CEP Discussion Papers dp0110, Centre for Economic Performance, LSE.
  13. Daron Acemoglu, 1997. "Training and Innovation in an Imperfect Labour Market," Review of Economic Studies, Oxford University Press, vol. 64(3), pages 445-464.
  14. Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Economics Department Working Papers 486, OECD Publishing.
  15. Orszag, J. Michael & Snower, Dennis J., 1998. "Anatomy of Policy Complementarities," Working Paper Series 500, Research Institute of Industrial Economics.
  16. Booth, Alison L, 1993. "Private Sector Training and Graduate Earnings," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 164-70, February.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:poleco:v:28:y:2012:i:1:p:88-104. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.