Self Directed Learning with Hidden Action: A Quadratic Model with an Implication for the Skills Gap

28 Pages Posted: 29 Apr 2019

See all articles by Anthony M. Marino

Anthony M. Marino

University of Southern California - Marshall School of Business

Date Written: April 17, 2019

Abstract

This paper considers a hidden action agency model in which an agent can be incentivized to simultaneously work and self train to increase productivity. We determine conditions under which the principal wants to incentivize concurrent working and training and conditions under which the agent would want to participate. Next we consider outside hiring as an alternative to internal working and training. We discuss the conditions under which the agent and the principal would be better off with internal and concurrent work and training as opposed to a pre-work training program, and we provide a reason for the skills gap. The results are also applicable to multitasking between work effort and capital maintenance effort.

Keywords: Human Capital, Investment, Agency

JEL Classification: L20, L21, L22, L23

Suggested Citation

Marino, Anthony M., Self Directed Learning with Hidden Action: A Quadratic Model with an Implication for the Skills Gap (April 17, 2019). Available at SSRN: https://ssrn.com/abstract=3373752 or http://dx.doi.org/10.2139/ssrn.3373752

Anthony M. Marino (Contact Author)

University of Southern California - Marshall School of Business ( email )

Dept. of Finance & Business Economics
Los Angeles, CA 90089
United States
213-740-6525 (Phone)
213-740-6650 (Fax)

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