Does Poaching Distort Training?

Espen R. Moen and Asa Rosen

No 3468, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We analyse the efficiency of the labour market outcome in a competitive search equilibrium model with endogenous turnover and endogenous general human capital formation. We show that search frictions do not distort training decisions if firms and their employees are able to coordinate efficiently, for instance, by using long-term contracts. In the absence of efficient coordination devices there is too much turnover and too little investments in general training. Nonetheless, the number of training firms and the amount of training provided are constrained optimal, and training subsidies therefore reduce welfare.

Keywords: efficiency; matching; poaching; training (search for similar items in EconPapers)
JEL-codes: J24 J41 J63 J64 (search for similar items in EconPapers)
Date: 2002-07
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Related works:
Working Paper: Does poaching distort training? (2002)
Journal Article: Does Poaching Distort Training? (2004)
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