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Worker Reciprocity and Employer Investment in Training

Author

Listed:
  • Edwin Leuven

    (University of Amsterdam)

  • Hessel Oosterbeek

    (University of Amsterdam)

  • Randolph Sloof

    (University of Amsterdam)

  • Chris van Klaveren

    (University of Amsterdam)

Abstract

Standard economic theory predicts that firms will not invest in general training and will underinvest in specific training. Empirical evidence, however, indicates that firms do invest in general training of their workers. Evidence from laboratory experiments points to less underinvestment in specific training than theory predicts. We propose a simple model in which a firm invests the socially optimal amounts in general and specific training if the worker is sufficiently motivated by reciprocity. A reciprocal worker may be willing to give the firm a full return on its investment. We present empirical evidence that supports the proposed mechanism. Workers with a high sensitivity to reciprocity have 15% higher training rates than workers with a low sensitivity to reciprocity. See publication in Economica , 2005, 72(285), 137-149.

Suggested Citation

  • Edwin Leuven & Hessel Oosterbeek & Randolph Sloof & Chris van Klaveren, 2002. "Worker Reciprocity and Employer Investment in Training," Tinbergen Institute Discussion Papers 02-090/3, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20020090
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    References listed on IDEAS

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    Cited by:

    1. Ruud Gerards & Andries de Grip & Maaike Witlox, 2014. "'Employability-miles' and worker employability awareness," Applied Economics, Taylor & Francis Journals, vol. 46(9), pages 952-965, March.
    2. Jacek Liwiński, 2017. "Premia płacowa z kształcenia na studiach podyplomowych," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 5, pages 105-127.
    3. Florian Englmaier & Stephen Leider, 2012. "Contractual and Organizational Structure with Reciprocal Agents," American Economic Journal: Microeconomics, American Economic Association, vol. 4(2), pages 146-183, May.
    4. Nadège Marchand & Claude Montmarquette, 2008. "Training Without Certification: An Experimental Study," CIRANO Working Papers 2008s-01, CIRANO.
    5. Florian Englmaier & Stephen Leider, 2020. "Managerial Payoff and Gift-Exchange in the Field," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(2), pages 259-280, March.
    6. Wiljan van den Berge & Egbert Jongen & Karen van der Wiel, 2017. "Using Tax Deductions to Promote Lifelong Learning: Real and Shifting Responses," CPB Discussion Paper 353, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Matthias Fahn & Anne Schade & Katharina Schüßler, 2017. "What Drives Reciprocal Behavior? The Optimal Provision of Incentives over the Course of Careers," CESifo Working Paper Series 6635, CESifo.
    8. Bilanakos, Christos, 2013. "Career concerns and firm – sponsored general training," Research in Economics, Elsevier, vol. 67(2), pages 117-132.
    9. Fahn, Matthias & Schade, Anne & Schüßler, Katharina, 2017. "Gift exchange vs. repeated interaction as a source of reciprocal behavior," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168150, Verein für Socialpolitik / German Economic Association.
    10. Asplund, Rita, 2004. "The Provision and Effects of Company Training. A brief review of the literature," Discussion Papers 907, The Research Institute of the Finnish Economy.
    11. Gerald Pruckner & Rupert Sausgruber, 2006. "A natural field experiment on newspaper purchasing," Natural Field Experiments 00320, The Field Experiments Website.
    12. Rita Asplund, 2005. "The Provision and Effects of Company Training: A Brief Review of the Literature," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 47-73.

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    More about this item

    Keywords

    Training; Reciprocity;

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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