Employer Incentives for Providing Informal On-the-job Training in the Presence of On-the-job Search

Seung-Gyu Sim () and Timothy Huegerich ()
Additional contact information
Seung-Gyu Sim: University of Wisconsin-Madison

Journal of Labor Research, 2018, vol. 39, issue 1, No 2, 22-40

Abstract: Abstract We analyze the provision of informal general training in a frictional labor market in which employers cannot commit to training levels and workers cannot commit to stay. We demonstrate that employers’ training decisions are driven by both an investment motive, to improve productivity, and a compensation motive, to increase employee retention. The investment motive decreases with higher wages, while the compensation motive increases. In our calibration exercises, the former dominates, which creates a negative relationship between wages and training. Furthermore, in contrast to recent studies missing the compensation motive, lessening the search frictions raises overall training levels due to enhanced compensation motives, approaching Becker’s result for a frictionless labor market.

Keywords: On-the-job search; On-the-job training (search for similar items in EconPapers)
JEL-codes: D83 E24 J24 J33 J64 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s12122-018-9261-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jlabre:v:39:y:2018:i:1:d:10.1007_s12122-018-9261-3

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/12122

DOI: 10.1007/s12122-018-9261-3

Access Statistics for this article

Journal of Labor Research is currently edited by Ozkan Eren

More articles in Journal of Labor Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().