The Low-Skill, Bad-Job Trap

Alun Thomas

No 1994/083, IMF Working Papers from International Monetary Fund

Abstract: The paper explains how a country can fall into a “low-skill, bad-job trap,” in which workers acquire insufficient training and firms provide insufficient skilled vacancies. In particular, the paper argues that in countries where a large proportion of the workforce is unskilled, firms have little incentive to provide good jobs (requiring high skills and providing high wages), and if few good jobs are available, workers have little incentive to acquire skills. In this context, the paper examines the need and effectiveness of training policy, and provides a possible explanation for why western countries have responded so differently to the broad-based shift in labor demand from unskilled to skilled labor.

Keywords: WP; market failure; training supply externality; vacancy supply externality; training function; wage-employment experience; job vacancy; earnings differential; vacancy decision; Skilled labor; Wages; Labor demand; Labor supply; Central and Eastern Europe; Europe (search for similar items in EconPapers)
Pages: 22
Date: 1994-07-01
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=870 (application/pdf)

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:imf:imfwpa:1994/083

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().