General Training by Firms, Apprentice Contracts, and Public Policy.
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...
| Main Authors: | , , |
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| Format: | Working paper |
| Language: | English |
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CESifo
2002
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| _version_ | 1797053591545970688 |
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| author | Malcomson, J Maw, J McCormick, B |
| author_facet | Malcomson, J Maw, J McCormick, B |
| author_sort | Malcomson, J |
| collection | OXFORD |
| description | 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. |
| first_indexed | 2024-03-06T18:45:48Z |
| format | Working paper |
| id | oxford-uuid:0e788ba0-5faf-46fc-8d7d-dd9173282c3d |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T18:45:48Z |
| publishDate | 2002 |
| publisher | CESifo |
| record_format | dspace |
| spelling | oxford-uuid:0e788ba0-5faf-46fc-8d7d-dd9173282c3d2022-03-26T09:46:02ZGeneral Training by Firms, Apprentice Contracts, and Public Policy.Working paperhttp://purl.org/coar/resource_type/c_8042uuid:0e788ba0-5faf-46fc-8d7d-dd9173282c3dEnglishDepartment of Economics - ePrintsCESifo2002Malcomson, JMaw, JMcCormick, BWorkers 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. |
| spellingShingle | Malcomson, J Maw, J McCormick, B General Training by Firms, Apprentice Contracts, and Public Policy. |
| title | General Training by Firms, Apprentice Contracts, and Public Policy. |
| title_full | General Training by Firms, Apprentice Contracts, and Public Policy. |
| title_fullStr | General Training by Firms, Apprentice Contracts, and Public Policy. |
| title_full_unstemmed | General Training by Firms, Apprentice Contracts, and Public Policy. |
| title_short | General Training by Firms, Apprentice Contracts, and Public Policy. |
| title_sort | general training by firms apprentice contracts and public policy |
| work_keys_str_mv | AT malcomsonj generaltrainingbyfirmsapprenticecontractsandpublicpolicy AT mawj generaltrainingbyfirmsapprenticecontractsandpublicpolicy AT mccormickb generaltrainingbyfirmsapprenticecontractsandpublicpolicy |