Wage Differentiation Via Subsidised General Training

29 Pages Posted: 28 Feb 2003

See all articles by V. Bhaskar

V. Bhaskar

University of Essex

Steinar Holden

University of Oslo - Department of Economics; Norges Bank; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: January 2003

Abstract

We provide a new explanation for why firms pay for general training in a competitive labor market. If firms are unable to tailor individual wages to ability, for informational or institutional reasons, they will pay for general training in order to attract better quality workers. The market provision of training may well exceed the first best level. Our explanation relies on wage compression within skill categories, while imperfect competition based explanations for firm subsidised general training rely on wage compression across skill categories.

JEL Classification: J31, D82

Suggested Citation

Bhaskar, V. and Holden, Steinar, Wage Differentiation Via Subsidised General Training (January 2003). Available at SSRN: https://ssrn.com/abstract=382920 or http://dx.doi.org/10.2139/ssrn.382920

V. Bhaskar

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom
+44 (0)1206 872744 (Phone)
+44 (0)1206 872724 (Fax)

Steinar Holden (Contact Author)

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway
+47 22 85 51 56 (Phone)
+47 22 85 50 35 (Fax)

HOME PAGE: http://folk.uio.no/~sholden/

Norges Bank ( email )

P.O. Box 1179
Oslo, N-0107
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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