@techreport{f0b7cd75d932409abc762ccea3954222,
title = "On-the-job-training as a signal: Why low-educated workers invest less in further training",
abstract = "Studies of on-the-job training have found that low skilled workers participate less in further training. In this paper, we develop a signalling model of training where training can increase productivity when workers{\textquoteright} prior ability matches the level of the training course. Consequently, employers can use observed training participation as information about the quality of their employees when job performance is unobservable. As a result, programs aimed at low ability workers will be underutilized because of the negative signal participation conveys about their initial ability. We show that offering training has spillover effects: introducing high-level courses to a choice set of only low-level courses increases participation in low-level courses, and improves sorting efficiency. We discuss the implications of these results for optimal training provision, and make several testable predictions for assessing the validity of our model.",
keywords = "training, human capital, signaling",
author = "Olga Meshcheriakova and Stan Vermeulen",
year = "2017",
month = sep,
day = "26",
doi = "10.26481/umagsb.2017021",
language = "English",
series = "GSBE Research Memoranda",
publisher = "Maastricht University, Graduate School of Business and Economics",
number = "021",
address = "Netherlands",
type = "WorkingPaper",
institution = "Maastricht University, Graduate School of Business and Economics",
}