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Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-52370

Gersbach, Hans; Schmutzler, Armin (2006). A Product-Market Theory of Industry-Specific Training. Working paper series / Socioeconomic Institute No. 610, University of Zurich.

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Abstract

We develop a product market theory that explains why firms provide their workers with skills that are sufficiently general to be potentially useful for competitors. We consider a model where firms first decide whether to invest in industry-specific 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 sufficiently soft and returns to the number of trained workers decrease sufficiently, 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.

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Socioeconomic Institute (former)
DDC:330 Economics
JEL Classification:D42, L22, L43, L92
Language:English
Date:November 2006
Deposited On:29 Nov 2011 23:47
Last Modified:09 Jul 2012 07:04
Series Name:Working paper series / Socioeconomic Institute
Official URL:http://www.econ.uzh.ch/wp.html

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