Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/63091 
Year of Publication: 
2002
Series/Report no.: 
Memorandum No. 2002,35
Publisher: 
University of Oslo, Department of Economics, Oslo
Abstract: 
We provide a new explanation for why firms pay for general training in a competitive labor market. If firms are unable to tailor individual wages to ability, for informational or institutional reasons, they will pay for general training in order to attract better quality workers. The market provision of training may well exceed the first best level. Our explanation relies on wage compression within skill categories, while imperfect competition based explanations for firm subsidised general training rely on wage compression across skill categories.
Subjects: 
competitive labor market
general training
JEL: 
D82
J31
Document Type: 
Working Paper

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