Arbeitspapier
Training, Job Security and Incentive Wages
This paper considers the optimal level of firm-specific training by taking into account the positive effect of training on the expected duration of workers' current employment. In the framework of an efficiency wage model, a short expected job tenure represents a disamenity that reduces the penalty from shirking. As this disamenity increases, workers have an incentive to continue providing a positive level of effort only if they are compensated by a higher wage. We endogenize the employment separation rate by introducing firm-specific training. Firm-specific training creates a rent that is lost if the worker is separated from the firm. As a result, the firm will be more reluctant to fire its trained workforce in a recession. This implies that firm-specific training can decrease current wages as it implies a credible commitment to lower future labour turnover.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 955
- Classification
-
Wirtschaft
- Subject
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efficiency wages
firm-specific training
- Event
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Geistige Schöpfung
- (who)
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Katsimi, Margarita
- Event
-
Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
-
2003
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Katsimi, Margarita
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2003
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