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Intra-firm Wage compression and Coverage of Training Costs

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  • Christian Pfeifer

Abstract

The author uses German linked employer-employee data to estimate the impact of intra-firm wage dispersion on the probability that establishments pay for further training. About half of all establishments in the estimation sample cover all direct and indirect training costs, which contradicts the standard human capital approach with perfect labor markets. The main finding of cross-section, panel, and instrumental variable probit estimations is that establishments with larger intra-firm wage compression are more likely to cover all direct and indirect training costs, which is consistent with theoretical considerations of the “new training literature†about imperfect labor markets.

Suggested Citation

  • Christian Pfeifer, 2016. "Intra-firm Wage compression and Coverage of Training Costs," ILR Review, Cornell University, ILR School, vol. 69(2), pages 435-454, March.
    • Handle: RePEc:sae:ilrrev:v:69:y:2016:i:2:p:435-454
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    Cited by:

    1. Jens Mohrenweiser & Thomas Zwick & Uschi Backes‐Gellner, 2019. "Poaching and Firm‐Sponsored Training," British Journal of Industrial Relations, London School of Economics, vol. 57(1), pages 143-181, March.
    2. Sandra Misiak-Kwit & Katarzyna Wlodarczyk & Ewa Mazur-Wierzbicka & Lukas Smerek & Jozef Durian, 2023. "The Human Resources Management System in Slovakia and Poland – Chosen Aspects," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 20-39.
    3. Tina Hinz & Jens Mohrenweiser, 2019. "Competition, Institutions and Company-sponsored Training," Economics of Education Working Paper Series 0162, University of Zurich, Department of Business Administration (IBW).

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