Firm training and wage rigidity

Wolfgang Lechthaler

No 1452, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Although wage rigidity is among the most prominent subjects in modern economics, its effects on wage compression and firm training have thus far not been considered. This paper is trying to bridge this gap by using a simple two period model which can still by analyzed analytically. I am able to show that wage rigidity increases wage compression. However, contrary to previous work this is not sufficient to increase firms' training investments. The reason lies in the endogeneity of separations, which become more frequent.

Keywords: Human capital; wage rigidity; training (search for similar items in EconPapers)
JEL-codes: J24 J31 M53 (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1452

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