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Information Advantages of Training Employers Despite Credible Training Certificates

Jens Mohrenweiser (), Gabriele Wydra-Somaggio and Thomas Zwick ()
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Gabriele Wydra-Somaggio: Institut fuer Arbeitsmarkt- und Berufsforschung (IAB)

No 121, Economics of Education Working Paper Series from University of Zurich, Department of Business Administration (IBW)

Abstract: We show that employers that invest in general human capital can positively select the employees they retain although training contents are transferable and visible to all employers (they are certified by credible external institutions). To solve the puzzle, we distinguish between soft and hard skills. Hard skills are tested in graded final exams and can be signalled to outside employers while soft skills are typically not tested and cannot be signalled. Therefore, the information advantage about soft skills can explain why employers keep a positive selection of training participants and invest in certified and transferable skills.

Keywords: training; employer change; adverse selection; asymmetric information (search for similar items in EconPapers)
JEL-codes: J24 J31 J62 J63 M52 M53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: 2017-01, Revised 2017-04
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