Skilled Workers' Unemployment and Firms' Training Decisions
University of Siena, Department of Economics, Working Paper No. 344
17 Pages Posted: 27 Jan 2003
Date Written: December 2001
In this paper it is shown that by explicitly considering the existence of unemployed trained workers, some of the results shown by Acemoglu and Pischke regarding the effect of unemployment on the firms' training decisions become ambiguous. In fact, two contrasting effects have to be considered: on the one hand, unemployment encourages training provision by firms through the negative effect on wages; on the other hand, the search for trained workers becomes easier when the unemployment rate is higher. When wages are little responsive to unemployment, this second effect might prevail.
JEL Classification: J41, J24, J31
Suggested Citation: Suggested Citation