General Training by Firms, Apprentice Contracts, and Public Policy

James Malcomson, James W. Maw, University of Swansea Wales, Barry McCormick and University of Southampton

No 86, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: Workers will not pay for general on-the-job training if contracts are not enforceable. Firms may if there are mobility frictions. Private information about worker productivities, however, prevents workers who quit receiving their marginal products elsewhere. Their new employers then receive external benefits from their training. In this paper, training firms increase profits by offering apprenticeships which commit firms to high wages for those trainees retained on completion. At these high wages, only good workers are retained. This signals their productivity and reduces the external benefits if they subsequently quit. Regulation of apprenticeship length (a historically important feature) enhances efficiency. Appropriate subsidies enhance it further. This paper is now published at the reference given below, however the unpublished appendices are available to be downloaded.

Keywords: contract enforceability; apprenticeships; regulation (search for similar items in EconPapers)
JEL-codes: J24 J38 (search for similar items in EconPapers)
Date: 2002-01-01
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Citations: View citations in EconPapers (7)

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Journal Article: General training by firms, apprentice contracts, and public policy (2003)
Working Paper: General Training by Firms, Apprentice Contracts, and Public Policy (2002)
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