Training Contracts, Employee Turnover, and the Returns from Firm-Sponsored General Training

Mitchell Hoffman and Stephen Burks

No 10835, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Firms may be reluctant to provide general training if workers can quit and use their gained skills elsewhere. "Training contracts" that impose a penalty for premature quitting can help alleviate this inefficiency. Using plausibly exogenous contractual variation from a leading trucking firm, we show that two training contracts significantly reduced post-training quitting, particularly when workers are approaching the end of their contracts. Simulating a structural model, we show that observed worker quit behavior exhibits aspects of optimization (for one of the two contracts), and that the contracts increased firm profits from training and reduced worker welfare relative to no contract.

Keywords: organizations; firm-sponsored general training; training contract; truck driver; trucking; truckload (search for similar items in EconPapers)
JEL-codes: J24 J41 M53 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2017-06
New Economics Papers: this item is included in nep-cta, nep-hrm and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://docs.iza.org/dp10835.pdf (application/pdf)

Related works:
Working Paper: Training Contracts, Employee Turnover, and the Returns from Firm-sponsored General Training (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp10835

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().