Training, Search and Wage Dispersion

Chao Fu
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Chao Fu: University of Wisconsin-Madison

Review of Economic Dynamics, 2011, vol. 14, issue 4, 650-666

Abstract: This paper combines on-the-job search and human capital theory to study the coexistence of firm-funded general training and frequent job turnovers. Although ex ante identical, firms differ in their training decisions. The model generates correlations between various firm characteristics that are consistent with the data. Wage dispersion exists among ex ante identical workers because workers of the same productivity are paid differently across firms, and because workers differ in their productivity ex post. Endogenous training breaks the perfect correlation between work experience and human capital, which yields new insights on wage dispersion and wage dynamics. (Copyright: Elsevier)

Keywords: On-the-job search; On-the-job training; General human capital; Wage dispersion; Wage persistence; Wage growth (search for similar items in EconPapers)
JEL-codes: J24 J31 J64 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (15)

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DOI: 10.1016/j.red.2010.11.003

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