Delegation and worker training

Christos Bilanakos (), John Heywood, John Sessions and Nikolaos Theodoropoulos

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: This paper models a principal-firm offering training to its agent-worker under alternative organizational structures: integration, where the principal retains authority to overrule the investment project recommended by the worker; and delegation, where the principal cannot overrule the worker’s preferred investment project. We identify the conditions under which delegation increases the profit-maximizing training intensity. Empirical estimates from matched employer-employee data show that workplaces delegating authority do provide more worker training. This result persists in two cross sections, in panel fixed effect estimates and across many robustness checks including an instrumental variable exercise that also controls for establishment fixed effects.

Keywords: Agency Theory; Delegation of Worker Authority; Training (search for similar items in EconPapers)
JEL-codes: D21 D22 D23 M53 M54 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2016-06
New Economics Papers: this item is included in nep-hrm, nep-net and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ucy:cypeua:06-2016

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