Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/170819
Authors: 
Hoffman, Mitchell
Burks, Stephen V.
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers 10835
Abstract: 
Firms may be reluctant to provide general training if workers can quit and use their gained skills elsewhere. "Training contracts" that impose a penalty for premature quitting can help alleviate this inefficiency. Using plausibly exogenous contractual variation from a leading trucking firm, we show that two training contracts significantly reduced post-training quitting, particularly when workers are approaching the end of their contracts. Simulating a structural model, we show that observed worker quit behavior exhibits aspects of optimization (for one of the two contracts), and that the contracts increased firm profits from training and reduced worker welfare relative to no contract.
Subjects: 
training contract
firm-sponsored general training
organizations
trucking
truck driver
truckload
JEL: 
J24
M53
J41
Document Type: 
Working Paper

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