Search Frictions, Credit Constraints andFirm Financed General Training
This paper shows that in a search model where future employers of trained workers donot benefit from the training in other firms, investment into general training will only be below the competitive level if workers are credit constrained. If workers are credit constrained, then the training firm cannot recover the cost of training since trained workers will search for a better paid job. This does, however, not imply that trainees will benefit from training. Only if the trainee wage is bounded by the workers' credit constraints do trainees gain from training.
|Date of creation:||2005|
|Date of revision:|
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- Acemoglu, D. & Pischke, J.S., 1997.
"The Structure of Wages and Investment in General Training,"
97-24, Massachusetts Institute of Technology (MIT), Department of Economics.
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Royal Economic Society, vol. 111(473), pages 485-505, July.
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- Stevens, Margaret, 1999. "Should Firms be Required to Pay for Vocational Training?," CEPR Discussion Papers 2099, C.E.P.R. Discussion Papers.
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