Is Wage Compression a Necessary Condition for Firm-Financed General Training?

Alison Booth and Gylfi Zoega

No 2845, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: It is well known that workers in Europe appear to receive more firm-provided general training than their counterparts in the United States. Moreover, there is considerable evidence that firms, in many cases, pay for the general training, contrary to the predictions of Becker (1964). In important recent contributions, Acemoglu and Pischke argue that it is through wage compression that unions and other labour-market institutions induce firms to invest in general training. We show that while wage compression can make firms more willing to pay for training, it does not constitute a necessary condition for firm-sponsored training.

Keywords: Firm-financed general training; Absolute- and relative wage compression (search for similar items in EconPapers)
JEL-codes: J24 J31 (search for similar items in EconPapers)
Date: 2001-06
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Citations: View citations in EconPapers (19)

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Journal Article: Is wage compression a necessary condition for firm-financed general training? (2004)
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