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Law and economics of training: a taxonomy of the main legal and institutional tools addressing suboptimal investments in human capital development

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  • Giulio Pedrini

    (University of Bologna
    SDIC–School of Development Innovation and Change
    CRISP-Interuniversity Research Centre on Public Services)

Abstract

Economic literature has widely acknowledged the growing role of firm training in the knowledge economy. Training fosters labour productivity, boosts competitiveness, and strengthens firms’ capacity to innovate. This key role of training, however, raises relevant issues in terms of the optimal level of the corresponding investment. In fact firms that bear training costs may not be able to fully appropriate the relevant benefits. In addition training may facilitate structural changes and stimulate growth nationwide. Efficiency reasons thus justify the existence of legal and/or institutional tools, either voluntary or mandatory, aimed at addressing suboptimal investments in human capital development. The purpose of this study is to draw a systematic taxonomy of the main legal and institutional devices able to address the underlying inefficiencies of training investments. Training is on the top of the political agenda in many countries. The European Union is committed to increase adults’ participation in lifelong learning and to improve the quality of training programs and institutions. However, while training is of increasing political interest, a proper tool-box for policy makers is still missing.

Suggested Citation

  • Giulio Pedrini, 2017. "Law and economics of training: a taxonomy of the main legal and institutional tools addressing suboptimal investments in human capital development," European Journal of Law and Economics, Springer, vol. 43(1), pages 83-105, February.
  • Handle: RePEc:kap:ejlwec:v:43:y:2017:i:1:d:10.1007_s10657-013-9384-1
    DOI: 10.1007/s10657-013-9384-1
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    Cited by:

    1. Pedrini, Giulio & Cappiello, Giuseppe, 2022. "The impact of training on labour productivity in the European utilities sector: An empirical analysis," Utilities Policy, Elsevier, vol. 74(C).

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    More about this item

    Keywords

    Training; Market failures; Economics of contracts; Labour law;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • K29 - Law and Economics - - Regulation and Business Law - - - Other
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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