Firm-sponsored Work-Related Training in Frictional Labour Markets: An empirical analysis for Switzerland

Michael Gerfin

Diskussionsschriften from Universitaet Bern, Departement Volkswirtschaft

Abstract: Work-related training is considered to be very important for providing the workforce with the necessary skills for maintaining and enhancing the competitiveness of the firms and the economy. According to the classical human capital theory general training is entirely financed by workers. This prediction is at odds with the empirical evidence. This observation inspired new theoretical models with frictional labour markets aiming at explaining the empirical evidence. These frictions create incentives for firms to invest in general training. Most important from a policy point of view is that the amount of training in this frictional world is below the optimal first-best solution achieved in the classical human capital model. Instruments to increase investment in training depend on the dominating kind of friction. This paper tries to identify the sources of frictions in the Swiss labour market. The results indicate that internal wage guarantees (minimum wages set in labour contracts) may play an important role

Keywords: Training; Wages; Market Imperfections; Mobility (search for similar items in EconPapers)
JEL-codes: C33 I2 J31 (search for similar items in EconPapers)
Date: 2003-10
New Economics Papers: this item is included in nep-edu and nep-lab
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ube:dpvwib:dp0317

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