Wage Differentiation Via Subsidised General Training

We provide a new explanation for why firms pay for general training in a competitive labor market. If firms are unable to tailor individual wages to ability, for informational or institutional reasons, they will pay for general training in order to attract better quality workers. The market provision of training may well exceed the first best level. Our explanation relies on wage compression within skill categories, while imperfect competition based explanations for firm subsidised general training rely on wage compression across skill categories.

• Publication year

  2002

• Venue

  Social Science Research Network

• Publication date

  2002-12-01

• Fields of study

  Economics

• Identifiers
  DOI 10.2139/ssrn.382920
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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