Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76169
Authors: 
Gersbach, Hans
Schmutzler, Armin
Year of Publication: 
2006
Series/Report no.: 
Working Paper, Socioeconomic Institute, University of Zurich 0610
Abstract: 
We develop a product market theory that explains why firms provide their workers with skills that are sufficiently general to be potentially useful for competitors. We consider a model where firms first decide whether to invest in industry-specific human capital, then make wage offers for each others' trained employees and finally engage in imperfect product market competition. Equilibria with and without training, and multiple equilibria can emerge. If competition is sufficiently soft and returns to the number of trained workers decrease sufficiently, firms may invest in non-specific training if others do the same, because they would otherwise suffer a competitive disadvantage or need to pay high wages in order to attract trained workers.
Subjects: 
industry-specific training
human capital
oligopoly
turnover
JEL: 
D42
L22
L43
L92
Document Type: 
Working Paper

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