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Training Costs and Wage Differentials in the Theory of Job Competition

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  • Schlicht, Ekkehart

Abstract

A labor market is considered that is characterized by job competition over job ladders. Firms paying more for comparable jobs can attract workers with better background characteristics (with general human capital) and will lose fewer trained workers (with general and firm-specific human capital). Optimizing behavior on the side of the firms gives rise to a wage structure that shows similar correlations between training and wages as would emerge in a human capital framework, but for different reasons. Further, the wage structure responds to other influences, like the degree of labor mobility.

Suggested Citation

  • Schlicht, Ekkehart, 1981. "Training Costs and Wage Differentials in the Theory of Job Competition," Munich Reprints in Economics 1347, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:1347
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    File URL: https://epub.ub.uni-muenchen.de/1347/1/schlicht-job-competition-ER.pdf
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    References listed on IDEAS

    as
    1. Harvey Leibenstein, 1975. "Aspects of the X-Efficiency Theory of the Firm," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 580-606, Autumn.
    2. Salop, S. C., 1973. "Wage differentials in a dynamic theory of the firm," Journal of Economic Theory, Elsevier, vol. 6(4), pages 321-344, August.
    3. Schlicht, Ekkehart, 1981. "Reference Group Behaviour and Economic Incentives: A Remark," Munich Reprints in Economics 4183, University of Munich, Department of Economics.
    4. Joesph E. Stiglitz, 1975. "Incentives, Risk, and Information: Notes Towards a Theory of Hierarchy," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 552-579, Autumn.
    5. Schlicht, Ekkehart, 1978. "Labour Turnover, Wage Structure, and Natural Unemployment," Munich Reprints in Economics 1255, University of Munich, Department of Economics.
    6. Schlicht, Ekkehart & Weizsäcker, Carl Christian von, 1977. "Risk Financing in Labour Managed Economics: The Commitment Problem," Munich Reprints in Economics 3148, University of Munich, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Schlicht, Ekkehart, 1988. "Promotions, Elections, and Other Contests: Comment on Sherwin Rosen," Munich Reprints in Economics 3170, University of Munich, Department of Economics.
    2. Schlicht, Ekkehart, 2008. "Lohnspreizung und Effizienz," Discussion Papers in Economics 2117, University of Munich, Department of Economics.
    3. Schlicht, Ekkehart, . "Job Rents in a Stylized Labor Market," Chapters in Economics,, University of Munich, Department of Economics.
    4. Michael Sattinger & Sumati Srinivas, 2003. "The Employment-Productivity Relation with Employment Criteria," Discussion Papers 03-07, University at Albany, SUNY, Department of Economics.

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    More about this item

    Keywords

    job competition; human capital; job ladders; specific training; general training; efficiency wages; turnover; wage structure;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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