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Training, Turnover, And Search

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  • Elena Quercioli

Abstract

This article explores a model of firm-specific training in a job search environment with labor turnover. The main substantive finding is a positive association between training and wages (when dispersed). The article then precisely characterizes how both wage dispersion and firm profitability depend on the flow value b > 0 of workers' unmatched time. It is shown that: (i) for all high values "b", no equilibrium exists; (ii) for intermediate values "b", multiple equilibria arise, where firms earn zero profits, and choose from a general wage distribution; (iii) for all lower values "b", there is a unique equilibrium, with firms earning positive profits, and choosing from an atomless set of wages. Copyright 2005 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Suggested Citation

  • Elena Quercioli, 2005. "Training, Turnover, And Search," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 133-143, February.
    • Handle: RePEc:ier:iecrev:v:46:y:2005:i:1:p:133-143
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    Cited by:

    1. Chéron, Arnaud & Hairault, Jean-Olivier & Langot, François, 2008. "A quantitative evaluation of payroll tax subsidies for low-wage workers: An equilibrium search approach," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 817-843, April.
    2. Feng, Shuaizhang & Zheng, Bingyong, 2010. "Imperfect Information, On-the-Job Training, and the Employer Size-Wage Puzzle: Theory and Evidence," IZA Discussion Papers 4998, Institute of Labor Economics (IZA).
    3. Rao, Neel, 2015. "General training in labor markets: Common value auctions with unobservable investment," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 19-45.
    4. Garloff Alfred & Kuckulenz Anja, 2006. "Training, Mobility, and Wages: Specific Versus General Human Capital," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(1), pages 55-81, February.
    5. Elizabeth Davis & Matthew Freedman & Julia Lane & Brian McCall & Nicole Nestoriak & Timothy Park, "undated". "Product Market Competition and Human Resource Practices: An Analysis of the Retail Food Sector," Working Papers 0905, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus).
    6. Rao, Neel, 2022. "Search equilibrium with unobservable investment," Games and Economic Behavior, Elsevier, vol. 133(C), pages 300-330.
    7. Chao Fu, 2011. "Training, Search and Wage Dispersion," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(4), pages 650-666, October.

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