 Is wage compression a necessary condition for firm-financed general training?Oxford Economic Papers, 2004, vol. 56, issue 1, 88-97 Abstract: In recent contributions, Acemoglu and Pischke argue that wage compression induces firms to invest in general training. However, they consider only absolute wage compression. We extend their approach to consider relative wage compression and argue that wage compression as generally understood in the literature is of the latter type. We show that factors associated with an increase in the absolute difference between output and wages might have no effect on the ratio of output and wages (e.g., if the output and wage of every worker doubles, there is absolute wage compression but not relative wage compression). Importantly, we show that, although relative wage compression is not a necessary condition for firms' willingness to pay for general training, it does increase firms' incentives to pay for workers' general training. We show that the departure from the competitive framework highlighted in Acemoglu and Pischke is much more general than implied by their analysis. Copyright 2004, Oxford University Press. Date: 2004 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:oxecpp:v:56:y:2004:i:1:p:88-97 Ordering information: This journal article can be ordered from Access Statistics for this article Oxford Economic Papers is currently edited by James Forder and Francis J. Teal More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. |
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