Market imperfections and firm-sponsored training

Jan C. van Ours and Matteo Picchio

No 7881, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Recent human capital theories predict that labor market frictions and product market competition influence firm-sponsored training. Using matched worker-firm data from Dutch manufacturing, our paper empirically assesses the validity of these predictions. We find that a decrease in labor market frictions significantly reduces firms' training expenditures. Instead, product market competition does not have an effect on firm-sponsored training. We conclude that increasing competition through international integration and globalization does not pose a threat to investments in on-the-job training. An increase in labor market flexibility may reduce incentives of firms to invest in training, but the magnitude of this effect is small.

Keywords: Firm-sponsored training; Labor market frictions; Product market competition; Matched worker-firm data (search for similar items in EconPapers)
JEL-codes: D43 J24 J42 L22 (search for similar items in EconPapers)
Date: 2010-06
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Market imperfections and firm-sponsored training (2011)
Working Paper: Market imperfections and firm-sponsored training (2010)
Working Paper: Market Imperfections and Firm-Sponsored Training (2010)
Working Paper: Market Imperfections and Firm-Sponsored Training (2010)
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