The Effects of Globalization on Worker Training

Abstract

We study how the integration of product and labor markets affects general worker training. When the number of firms under autarky is not too small and training would lead to a sufficiently large productivity increase, integration reduces training, often resulting in lower welfare. We also show that opening product markets to countries with publicly funded training or cheap low-skilled labor can threaten apprenticeship systems.

Keywords: general worker training, human capital, oligopoly, turnover, globalization

JEL Classification: D43, J24