Shared investment in general training: the role of information

Eliakim Katz and Adrian Ziderman

No 535, Policy Research Working Paper Series from The World Bank

Abstract: The major premise of this paper is that potential recruiters do not possess much information on the extent and type of workers'on-the-job-training. Workers taken for trained might turn out to possess no, or very little, general training. Also, a worker recruited for a given job may possess the wrong type of general training. All this imposes substantial information-based costs on firms that recruit rather than train. These costs include opportunity costs, actual expenses and increased exposure to risk. As a result, a recruiting firm will offer lower wages and place a lower value on a recruited worker with general training than the firm that trained him.

Keywords: Tertiary Education; Primary Education; Labor Standards; Teaching and Learning; ICT Policy and Strategies (search for similar items in EconPapers)
Date: 1990-11-30
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Citations: View citations in EconPapers (94)

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