General Training by Firms, Apprentice Contracts, and Public Policy

Arbeitspapier

Workers will not pay for general on-the-job training if contracts are not enforceable. Firms may if there are mobility frictions. Private information about worker productivities, however, prevents workers who quit receiving their marginal products elsewhere. Their new employers then receive external benefits from their training. In this paper, training firms increase profits by offering apprenticeships which commit firms to high wages for those trainees retained on completion. At these high wages, only good workers are retained. This signals their productivity and reduces the external benefits if they subsequently quit. Regulation of apprenticeship length (a historically important feature) enhances efficiency. Appropriate subsidies enhance it further.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 696

Classification and Topics

• Classification: Wirtschaft
• Subject: general training ; contract enforceability ; apprenticeships ; regulation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Malcomson, James M. ; Maw, James W. ; McCormick, Barry
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/75991
• Last update: 10.03.2025, 11:44 AM CET