In the standard model of human capital with perfect labor markets general training. When labor market frictions compress the structure of wages in the general skills of their employees. The reason is that the distortion in the wage structure" turn technologically' general skills into specific' skills. Labor market frictions and institutions such as minimum wages and union wage setting, are crucial in shaping the wage structure thus have an important impact on training. Our results suggest that the more frictional and" regulated labor markets in Europe and Japan may generate more firm-sponsored general training" than the U.S.
A systematic account of the causes, consequences, and policy implications of failure in training provision and skills acquisition in the industrial world. A systematic account of the causes, consequences, and policy implications of failure in training provision and skills acquisition in the industrial world.
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This paper considers the sources of skill formation in a modern economy and emphasizes the importance of both cognitive and noncognitive skills in producing economic and social success and the importance of both formal academic institutions and families and firms as sources of learning. Skill formation is a dynamic process with strong synergistic components. Skill begets skill. Early investment promotes later investment. Noncognitive skills and motivation are important determinants of success and these can be improved more successfully and at later ages than basic cognitive skills. Methods currently used to evaluate educational interventions ignore these noncogntive skills and therefore substantially understate the benefits of early intervention programs and mentoring and teenage motivation programs. At current levels of investment, American society underinvests in the very young and overinvests in mature adults with low skills.
A bilateral moral-hazard problem provides a rationale for "up-or-ou t" employment contracts. The employer sets a wage higher than opportunit y cost to induce the worker to invest in firm-specific capital. If the individual does not make the grade, it is in the firm's interest ex post to fire him. Had the initial arrangement not included provisions for firing individuals, the firm would underreport the value of the employee, wrecking the incentive scheme. The basic model permits both firm and worker to be risk neutral. Therefore, it admits a straightforward multiperiod extension, which the authors also investi gate.
Lifelong learning is often promoted in ageing societies, but little is known about its returns or governments’ ability to advance it. This paper evaluates the effects of a large-scale randomized field experiment issuing vouchers for adult education in Switzerland. We find no significant average effects of voucher-induced adult education on earnings, employment, and subsequent education one year after treatment. But effects are heterogeneous: Low-education individuals are most likely to profit from adult education, but least likely to use the voucher. The findings cast doubt on the effectiveness of existing untargeted voucher programs in promoting labor market outcomes through adult education.
Training for skills that are transferable to other firms, but for which the external labor market is imperfectly competitive, cannot be analyzed using the traditional tools of general and specific training. It is known that firms (as well as workers) have an incentive to invest in such training but that there is an externality problem that may lead to underinvestment. Using a formal model, it is shown that the problem is most severe at 'intermediate' levels of labor-market competition. The effects are that too few workers are trained and there is overinvestment in purely specific training.
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