Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-52172
Gersbach, Hans; Schmutzler, Armin (2003). A Product Market Theory of Worker Training. Working paper series / Socioeconomic Institute No. 214, University of Zurich.
We develop a product market theory that explains why firms invest in general training of their workers. We consider a model where firms first decide whether to invest in general human capital, then make wage offers for each others’ trained employees and finally engage in imperfect product market competition. Equilibria with and without training, and multiple equilibria can emerge. If competition is suffciently soft and trained workers are substitutes, firms may invest in non-specific training if others do the same, because they would otherwise suffer a competitive disadvantage or need to pay high wages in order to attract trained workers. Government intervention can be socially desirable to turn training into a focal equilibrium.
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|Item Type:||Working Paper|
|Communities & Collections:||03 Faculty of Economics > Department of Economics
Working Paper Series > Socioeconomic Institute (former)
|JEL Classification:||D42, L22, L43, L92|
|Deposited On:||29 Nov 2011 22:32|
|Last Modified:||09 Jul 2012 05:02|
|Series Name:||Working paper series / Socioeconomic Institute|
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