The effects of wage compression on general and firm-specific training

Thomas Ericson

Applied Economics Letters, 2007, vol. 15, issue 3, 165-169

Abstract: The issue of who finances on-the-job training has important implications for labour markets. It is persistently difficult to test empirically whether it is the employer or the employee who carries the costs of general training. This article presents a simple method that compares the effect of wage inequality on duration of general training and firm-specific training. The result is consistent with the proposition that it is the worker who bears a greater part of the costs associated with general training than in the case of firm-specific training.

Date: 2007
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DOI: 10.1080/13504850600722054

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