Matching, Screening and Firm Investment in General Training: Theory and Evidence

Damon Clark ()
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Damon Clark: Nuffield College, Oxford

No A2-4, 10th International Conference on Panel Data, Berlin, July 5-6, 2002 from International Conferences on Panel Data

Abstract: When job matching is important, we show that firms will pay for general training under very weak conditions. The key ingredient in our model is the idea that it is more costly to screen skilled workers than it is to screen unskilled ones. In equilibrium, this 'softens' competition for trained workers, allowing firms to recoup training investments. We apply our model to a classic case of firm investment in general training - German Apprenticeship Training - and show that a key prediction of our model that is not shared by other models is strongly supported in the data.

Keywords: General Training; Human Capital; Auctions; Wages (search for similar items in EconPapers)
JEL-codes: J24 J41 D44 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: 2002-04
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