General training under asymmetric information

One widely accepted conclusion in the human capital literature on training is that firms will finance only firm-specific training because it is non-transferable to other firms. Firms will not be willing to finance training in general (transferable) skills. In this paper it is argued that a recruiting firm will possess only limited knowledge of the training level in general skills acquired by workers in other firms. Hence a worker with transferable skills who changes employer can expect to suffer a cut in wages for a transition period while his level of productivity is being evaluated and recognized. Such a worker has no incentive to move as long as the present value of the loss in earnings is greater than the present value of the loss incurred in remaining with the training firm at a wage below the market-level for his skill. This result may have some important policy implications in countering the effects of market imperfections. It also suggests that training certification, in facilitating inter-firm mobility, discourages on-the-job training by firms.ICT Policy and Strategies,Labor Standards,Tertiary Education,Primary Education,Agricultural Research

Do Some Employers Share the Costs and Benefits of General Training?

[Excerpt] One of the central propositions of the human capital theory of on-the-job training is that workers pay all the costs and receive all the benefits of general training (see Ehrenberg and Smith 1996, Filer, Hammermesh and Rees 1996, Borjas 1996, Kaufman 1986). Since general training raises a worker\u27s ability to be productive in other organizations as well as the one providing the training, the training firm must pay a wage commensurate with the trained worker\u27s new higher level of productivity if they are to prevent the loss of their trained workers. Since the workers, not the firm, get the benefits of the training, firms [will] provide general training only if they [do] not have to pay any of the costs (Becker 1962 p. 13). Since the training is of value to prospective trainees, equilibrium in the training market requires that employees pay for general on-the-job training by receiving wages below what could be received elsewhere (Becker 1962 p. 13) in a job offering no training. Is this correct? Do Workers pay all the costs of training in skills that are technically general (i.e. useful at other firms)--WPAC for short? Do workers receive all the benefits of general training ( WRAB for short)

Wage Differentiation via Subsidised General Training

We provide a new explanation for why firms pay for general training in a competitive labor market. If firms for informational or institutional reasons are unable to tailor wages according to ability, they will have an incentive to pay for general training in order to attract better quality workers. Under fairly weak conditions, we show that labor market equilibrium must involve subsidised general training. This does not require that firms capture a return in the form of a productivity rise induced by training that exceeds the wage rise. The market provision of training may well exceed the socially optimal level.

Meteorological Input to General Aviation Pilot Training

The meteorological education of general aviation pilots is discussed in terms of the definitions and concepts of learning and good educational procedures. The effectiveness of the metoeorological program in the training of general aviations pilots is questioned. It is suggested that flight instructors provide real experience during low ceilings and visibilities, and that every pilot receiving an instrument rating should experience real instrument flight

Investment in General Training with Consensual Layoffs

We study non-contractible firms' investment in general training in a model of frictional unemployment. Since training is vested in workers, firms' return to training is zero when a match ends. Consensual layoff provisions or large severance payments oblige firms to bargain efficiently over the joint payoff from separation. This increases employers' incentives to train as they share workers' outside return to general human capital. The result generalizes to all types of general investment that are vested in the non-investing party on separation. We also show that, independently from underinvestment in training, the laissez-faire equilibrium is always inefficient for any given level of investment.Consensual layoffs, General training, Matching

The Returns to Continuous Training in Germany: New Evidence from Propensity Score Matching Estimators

The present paper examines the wage effects of continuous training programs using individual-level data from the German Socio Economic Panel (GSOEP). In order to account for selectivity in training participation we estimate average treatment effects (ATE and ATT) of general and firm-specific continuous training programs using several state-of-the-art propensity score matching (PSM) estimators. Additionally, we also apply a combined matching difference-in-differences (MDiD) estimator to account for unobserved individual characteristics (e.g. motivation, ability). While the estimated ATE and ATT for general training are significant ranging between about 4 and 7.5 %, the corresponding wage effects of firm-specific training are mostly insignificant. Using the more appropriate MDiD estimator, however, we find a more precise and highly significant wage effect of about 5 to 6 %, though only for general training and not for firm-specific training. These results are consistent with standard human capital theory insofar as general training is associated with larger wage increases than firm-specific training. Furthermore, we conclude that firms may intend to use specific training to adjust to new job requirements, while career-relevant changes may be conditioned to general training.Continuous training; wage effect; average treatment effect; selectivity bias; propensity score matching estimators; combined matching difference-in-differences estimator.

Training, Mobility, and Wages: Specific Versus General Human Capital

This paper considers training, mobility decisions and wages together to test for the specificity of human capital contained in continuing training courses. We empirically analyse the relationship between training, mobility and wages in two ways. First, we examine the correlation between training and mobility. In a second step, we consider wage effects of mobility taking training participation into account. First, we find that training participation is negatively correlated with the mobility decision and that training participation decreases the probability of individuals to change the job. Second, we find that wages are lower for job changers for the group of training participants, so wages decrease when trained individuals are mobile. Finally, training participation negatively affects the individuals's subjective valuation of the quality of their last job change. Taken together, these results suggest that there is some specific human capital, which is incorporated into training and lost when moving between jobs. --training,mobility,wages,search,job matching

Evaluation of Airport Security Training Programs: Perspectives and Issues

While many governments and airport operators have emphasized the importance of security training and committed a large amount of budget to security training programs, the implementation of security training programs was not proactive but reactive. Moreover, most of the security training programs were employed as a demand or a trendchasing activity from the government. In order to identify issues in airport security training and to develop desirable security training procedures in an airport, this preliminary study aims at providing (1) the description of current state of airport security training and training in general, (2) the study design and interview guide for studying airport security training, and (3) expected outcome from the study

Training and early Retirement

In this paper we analyze how retirement behavior is affected by a worker’s firm-specific or general training history. Using US data from the National Longitudinal Survey of Older Men and controlling for the effects of technological change and workers’ retirement preferences, we find that workers with a firm-specific training history retire earlier than workers with a general training background. This indicates that shared investments in firm-specific training are embedded in upward sloping earning profiles that create productivity-wage differentials for older workers.education, training and the labour market;