Local employer competition and training of workers

The new training literature suggests that in a monopsonistic market employers will not only pay for firm-specific training but also pay for general training if the risk of poaching is limited. This implies that training should decrease with more competition for employees among firms. Using worker-level data for Germany on training participation and on training duration, the authors find empirical support for this hypothesis. Specifically, the authors find that employees are significantly less likely to participate in training if the local density of firms in a sector is high and they have shorter training durations when the local sector concentration is low.