Market imperfections and firm-sponsored training
(2010) , 24 pages
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- Authors
- Abstract
- Recent human capital theories predict that labor market frictions and product market competition influence firm-sponsored training. Using matched worker-firm data from Dutch manufacturing, our paper empirically assesses the validity of these predictions. We find that a decrease in labor market frictions significantly reduces firms’ training expenditures. Instead, product market competition does not have an effect on firm-sponsored training. We conclude that increasing competition through international integration and globalization does not pose a threat to investments in on-the-job training. An increase in labor market flexibility may reduce incentives of firms to invest in training, but the magnitude of this effect is small.
- Affiliations
Tilburg University and IZA Tilburg University, University of Melbourne, IZA and CEPR
Citations
Picchio, M., & Van Ours, C. (2010). Market imperfections and firm-sponsored training (IRES Discussion papers 2010026). https://hdl.handle.net/2078.5/47105