Mismatch, On-the-job Training, and Unemployment

Frédéric Gavrel, Jean-Pascal Guironnet and Isabelle Lebon

Economics Working Paper Archive (University of Rennes & University of Caen) from Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS

Abstract: In this paper, training, which is seen as a way to reduce the mismatch between workers and jobs, takes place on the job. We show that a general rise in unemployment lowers the probability of on-the-job training by reducing the mismatch. We then close the model by assuming free-entry and study its social efficiency properties. Private educational choices are socially optimal, but job creation is too high under the Hosios condition. Using French data on regional unemployment, we estimate a probit model of the training decision and find that on-the-job training is significantly less probable in regions with high unemployment.

Keywords: On-the-job training; Mismatch, Equilibrium unemployment, Market efficiency (search for similar items in EconPapers)
JEL-codes: H21 J24 J64 (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-dge, nep-eur and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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