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Market Imperfections and Firm-Sponsored Training

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  • Picchio, M.

    (Tilburg University, School of Economics and Management)

  • van Ours, J.C.

    (Tilburg University, School of Economics and Management)

Abstract

Recent human capital theories predict that labor market frictions and product market competition influence firm-sponsored training. Using matched worker-firm data from Dutch manufacturing, our paper empirically assesses the validity of these predictions. We find that a decrease in labor market frictions significantly reduces firms' training expenditures. Instead, product market competition does not have an effect on firm-sponsored training. We conclude that increasing competition through international integration and globalization does not pose a threat to investments in on-the-job training. An increase in labor market flexibility may reduce incentives of firms to invest in training, but the magnitude of this effect is small.
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  • Picchio, M. & van Ours, J.C., 2010. "Market Imperfections and Firm-Sponsored Training," Other publications TiSEM 81b2ea8b-3bb0-4c10-a87f-2, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:81b2ea8b-3bb0-4c10-a87f-2fc23f26f6be
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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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