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Firm-Provided Training and Labor Market Policies

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  • Felipe Balmaceda

Abstract

This paper studies firm-provided training in the presence of the following labor market policies: minimum wages, unemployment benefits, firing costs, and severance payments. I show that in high minimum wage economies, a more intense use of labor market policies reduces firm-provide training, while in low minimum wage economies, this may result in more training. The results of the paper are used to shed light on the relationship between the skill-premium and labor-market policies. In particular, I show that the skill premium is non-decreasing in the strictness of employment-protection legislation and non-increasing with the minimum wage and unemployment benefits.

Suggested Citation

  • Felipe Balmaceda, 2008. "Firm-Provided Training and Labor Market Policies," Documentos de Trabajo 252, Centro de Economía Aplicada, Universidad de Chile.
  • Handle: RePEc:edj:ceauch:252
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