General training by firms, apprentice contracts, and public policy


Malcomson, James M., Maw, James W. and McCormick, Barry (2003) General training by firms, apprentice contracts, and public policy. European Economic Review, 47, (2), 197-227. (doi:10.1016/S0014-2921(02)00207-6).

Download

Full text not available from this repository.

Description/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.

Item Type: Article
ISSNs: 0014-2921 (print)
Related URLs:
Keywords: general training, contract enforceability, apprenticeships, regulation
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Divisions: University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 33374
Date Deposited: 16 May 2006
Last Modified: 27 Mar 2014 18:20
URI: http://eprints.soton.ac.uk/id/eprint/33374

Actions (login required)

View Item View Item