Training and Search on the Job
Rasmus Lentz and
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Rasmus Lentz: Northwestern University
No 2016-25, Working Papers from Federal Reserve Bank of St. Louis
The paper studies human capital accumulation over workers? careers in an on the job search setting with heterogenous firms. In renegotiation proof employment con- tracts, more productive firms provide more training. Both general and specific training induce higher wages within jobs, and with future employers, even conditional on the future employer type. Because matches do not internalize the specific capital loss from employer changes, specific human capital can be over-accumulated, more so in low type firms. While validating the Acemoglu and Pischke (1999) mechanisms, the analysis nevertheless arrives at the opposite conclusion: That increased labor market friction reduces training in equilibrium.
Keywords: Wage contracts; human capital; training; wage dispersion; frictional labor markets; optimal contract design; firm heterogeneity; sorting (search for similar items in EconPapers)
JEL-codes: D21 D43 D83 E24 J24 J31 J33 J41 J62 J63 J64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-hrm, nep-ltv and nep-mac
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Working Paper: Training and Search On the Job (2016)
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