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General training by firms, apprentice contracts, and public policy

Record type: Monograph (Discussion Paper)

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. Training firms increase profits by offering apprenticeships committing them to high wages for trainees retained on completion. At those wages, only good workers are retained, which signals their productivity and reduces the external benefits if they subsequently quit. Regulation of apprenticeship length (a historically important feature) can enhance efficiency, as can appropriate subsidies.

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Citation

Malcomson, James M., Maw, James W. and McCormick, Barry (2000) General training by firms, apprentice contracts, and public policy , Southampton, UK University of Southampton 47pp. (Discussion Papers in Economics and Econometrics, 21).

More information

Published date: 2000

Identifiers

Local EPrints ID: 33121
URI: http://eprints.soton.ac.uk/id/eprint/33121
PURE UUID: 74f6995d-0d14-4399-bbcf-9cb97e5a3890

Catalogue record

Date deposited: 19 Jul 2006
Last modified: 17 Jul 2017 15:53

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Contributors

Author: James M. Malcomson
Author: James W. Maw
Author: Barry McCormick

University divisions


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