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Shared investment in general training : the role of information

Author

Listed:
  • Katz, Eliakim
  • Ziderman, Adrian

Abstract

The major premise of this paper is that potential recruiters do not possess much information on the extent and type of workers'on-the-job-training. Workers taken for trained might turn out to possess no, or very little, general training. Also, a worker recruited for a given job may possess the wrong type of general training. All this imposes substantial information-based costs on firms that recruit rather than train. These costs include opportunity costs, actual expenses and increased exposure to risk. As a result, a recruiting firm will offer lower wages and place a lower value on a recruited worker with general training than the firm that trained him.

Suggested Citation

  • Katz, Eliakim & Ziderman, Adrian, 1990. "Shared investment in general training : the role of information," Policy Research Working Paper Series 535, The World Bank.
  • Handle: RePEc:wbk:wbrwps:535
    as

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    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1990/11/01/000009265_3960930051813/Rendered/PDF/multi_page.pdf
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    References listed on IDEAS

    as
    1. Katz, Eliakim & Ziderman, Adrian, 1989. "General training under asymmetric information," Policy Research Working Paper Series 170, The World Bank.
    2. Hashimoto, Masanori, 1981. "Firm-Specific Human Capital as a Shared Investment," American Economic Review, American Economic Association, vol. 71(3), pages 475-482, June.
    3. Parsons, Donald O, 1972. "Specific Human Capital: An Application to Quit Rates and Layoff Rates," Journal of Political Economy, University of Chicago Press, vol. 80(6), pages 1120-1143, Nov.-Dec..
    4. Feuer, M. & Glick, H. & Desai, A., 1987. "Is firm-sponsored education viable?," Journal of Economic Behavior & Organization, Elsevier, vol. 8(1), pages 121-136, March.
    Full references (including those not matched with items on IDEAS)

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