Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/34594 
Authors: 
Year of Publication: 
2007
Series/Report no.: 
IZA Discussion Papers No. 2932
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Market imperfections may cause firms and workers to under-invest in specific training. This paper shows that profit sharing may be a suitable instrument to enhance specific training investments, either by enhancing wage flexibility or by increasing the returns to training. As a result, profit sharing not only increases productivity by means of an effort effect, but also by increased training investments. Furthermore, the results suggest that older workers' employability can be improved if a profit-related remuneration is paid.
Document Type: 
Working Paper

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