Firms' Training Decisions and Unemployment in Italian Labour Markets

Giornale degli Economisti e Annali di Economia, Vol. 61, No. 1, pp. 103-26, 2002

Posted: 29 Jan 2009

See all articles by Maria De Paola

Maria De Paola

Università degli Studi della Calabria - Department of Economics and Statistics

Vincenzo Scoppa

Università degli Studi della Calabria - Department of Economics and Statistics

Date Written: January 27, 2009

Abstract

Some recent theories of human capital investments show that firms could be interested in paying for the general training of their workers. However, when search costs are low because there is a large availability of skilled workers on the market (that is, when the skilled unemployment/vacancy ratio is high), firms might find it optimal to hire skilled workers on the market rather than provide training to inexperienced workers. In this paper, these aspects are studied through a model with search and matching frictions. In order to empirically verify the relationship between training and labour market tightness across Italian regions, we use, as exogenous determinants of unemployment, the regional differences in separation rates and in labour productivity (in face of a centralised wage bargaining system). Consistently with theoretical predictions, the evidence shows that training is negatively influenced by unemployment and turnover and positively by labour productivity.

Keywords: Training, Unemployment, Italian labour markets, Productivity differentials, Turnover

JEL Classification: J41, J24, J31

Suggested Citation

De Paola, Maria and Scoppa, Vincenzo, Firms' Training Decisions and Unemployment in Italian Labour Markets (January 27, 2009). Giornale degli Economisti e Annali di Economia, Vol. 61, No. 1, pp. 103-26, 2002. Available at SSRN: https://ssrn.com/abstract=1333732

Maria De Paola

Università degli Studi della Calabria - Department of Economics and Statistics ( email )

via Ponte Bucci
Arcavacata di Rende, Cosenza 87036
Italy

Vincenzo Scoppa (Contact Author)

Università degli Studi della Calabria - Department of Economics and Statistics ( email )

via Ponte Bucci
Arcavacata di Rende, Cosenza 87036
Italy

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