Imperfect information and training quality

W. Smits

doi:10.1111/j.1467-9914.2005.00329.x

Imperfect information and training quality

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

This paper develops a theoretical model in which the level of training provided by a firm is not observed by workers. It is therefore not possible to have training wages completely contingent upon the level of training provided. Training wages will be too high. This, in turn, prevents firms from recouping the full benefits from training and leads to underinvestment. The more general the training, the more severe this underinvestment problem.

Original language	English
Pages (from-to)	655-671
Number of pages	17
Journal	Labour - Review of Labour Economics and Industrial Relations
Volume	19
Issue number	4
DOIs	https://doi.org/10.1111/j.1467-9914.2005.00329.x
Publication status	Published - 1 Jan 2005

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10.1111/j.1467-9914.2005.00329.x

Cite this

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title = "Imperfect information and training quality",

abstract = "This paper develops a theoretical model in which the level of training provided by a firm is not observed by workers. It is therefore not possible to have training wages completely contingent upon the level of training provided. Training wages will be too high. This, in turn, prevents firms from recouping the full benefits from training and leads to underinvestment. The more general the training, the more severe this underinvestment problem.",

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AB - This paper develops a theoretical model in which the level of training provided by a firm is not observed by workers. It is therefore not possible to have training wages completely contingent upon the level of training provided. Training wages will be too high. This, in turn, prevents firms from recouping the full benefits from training and leads to underinvestment. The more general the training, the more severe this underinvestment problem.

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