Does Poaching Distort Training?
Espen R. Moen
Norwegian School of Management; Centre for Economic Policy Research (CEPR)
Stockholm University - Swedish Institute for Social Research (SOFI); University of Oslo
We analyse the efficiency of the labour market outcome in a competitive search equilibrium model with endogenous turnover and endogenous general human capital formation. We show that search frictions do not distort training decisions if firms and their employees are able to coordinate efficiently, for instance, by using long-term contracts. In the absence of efficient coordination devices there is too much turnover and too little investments in general training. Nonetheless, the number of training firms and the amount of training provided are constrained optimal, and training subsidies therefore reduce welfare.
Number of Pages in PDF File: 38
Keywords: Matching, Training, Poaching, Efficiency
JEL Classification: J24, J41, J63, J64working papers series
Date posted: March 7, 2003
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