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On the Incidence of Employment Subsidies to Vocational Training

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  • Karsten Albæk

    (Department of Economics, University of Copenhagen)

Abstract

The present paper analyses employment subsidies to vocational training under union wage bargaining. The analysis includes an investigation of the consequences of financing the subsidy by a levy on employment, which is the typical way of financing these types of subsidies in many countries. The paper demonstrates high incidence rates of subsidies to vocational training under standard assumptions about the preference structure of the union. The financing scheme appears to counteract the purpose of the subsidy.

Suggested Citation

  • Karsten Albæk, 2010. "On the Incidence of Employment Subsidies to Vocational Training," CAM Working Papers 2010-02, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  • Handle: RePEc:kud:kuieca:2010_02
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    File URL: http://www.econ.ku.dk/cam/wp0910/2010-02.pdf/
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    References listed on IDEAS

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    1. Daron Acemoglu & Jörn-Steffen Pischke, 1998. "Why Do Firms Train? Theory and Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 113(1), pages 79-119.
    2. Stevens, Margaret, 2001. "Should Firms Be Required to Pay for Vocational Training?," Economic Journal, Royal Economic Society, vol. 111(473), pages 485-505, July.
    3. Booth,Alison L., 1994. "The Economics of the Trade Union," Cambridge Books, Cambridge University Press, number 9780521468398.
    4. Malcomson, James M. & Maw, James W. & McCormick, Barry, 2003. "General training by firms, apprentice contracts, and public policy," European Economic Review, Elsevier, vol. 47(2), pages 197-227, April.
    5. Christian Dustmann & Uta Schönberg, 2009. "Training and Union Wages," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 363-376, May.
    6. Farber, Henry S, 1978. "Individual Preferences and Union Wage Determination: The Case of the United Mine Workers," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 923-942, October.
    7. MaCurdy, Thomas E & Pencavel, John H, 1986. "Testing between Competing Models of Wage and Employment Determination in Unionized Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 3-39, June.
    8. Calmfors, Lars & Lang, Harald, 1995. "Macroeconomic Effects of Active Labour Market Programmes in a Union Wage-Setting Model," Economic Journal, Royal Economic Society, vol. 105(430), pages 601-619, May.
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