On the Information-Gathering Role of Firm-Sponsored Training for New Hires
According to Becker´s human-capital theory, employers tend to underinvest in general training relative to specific training because it increases their existing employees´ outside opportunities. We show that this is not necessarily true if training has an information-gathering function that allows an agent to learn his skills. An example is the training of new hires. When training creates an information asymmetry between the principal and the agent, the principal may overinvest in general training relative to specific training. General training helps the principal reduce the incentive problem inside the firm. Becker´s result of underinvestment in general training may not hold when training creates asymmetric information.
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Volume (Year): 165 (2009)
Issue (Month): 2 (June)
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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.:
- David H. Autor, 2001.
"Why Do Temporary Help Firms Provide Free General Skills Training?,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 116(4), pages 1409-1448.
- David H. Autor, 2000. "Why Do Temporary Help Firms Provide Free General Skills Training?," NBER Working Papers 7637, National Bureau of Economic Research, Inc.
- Bontems, Philippe & Bourgeon, Jean-Marc, 2000. "Creating countervailing incentives through the choice of instruments," Journal of Public Economics, Elsevier, vol. 76(2), pages 181-202, May.
- Bharat N. Anand & Alexander Galetovic, 2000. "Weak Property Rights and Holdup in R&D," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 9(4), pages 615-642, December.
- Daron Acemoglu, 1997. "Training and Innovation in an Imperfect Labour Market," Review of Economic Studies, Oxford University Press, vol. 64(3), pages 445-464. Full references (including those not matched with items on IDEAS)
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