TY - UNPB
T1 - Cost-Sharing of General and Specific Training with Depreciation of Human Capital
AU - Pichler, Eva
PY - 1991/11/1
Y1 - 1991/11/1
N2 - The paper demonstrates that in a two-period model with imperfect capital markets firms will share the costs and returns of general training if human capital depreciates over time. Analyzing the firm's choice of the level of investment and the sharing-rule, it is shown that in spite of cost-sharing there will be an inefficient provision of general training: firms will economize on training in order to reduce workers' expected gain from quitting. If training is both general and firm-specific, overinvestment in firm-specific training will result.
AB - The paper demonstrates that in a two-period model with imperfect capital markets firms will share the costs and returns of general training if human capital depreciates over time. Analyzing the firm's choice of the level of investment and the sharing-rule, it is shown that in spite of cost-sharing there will be an inefficient provision of general training: firms will economize on training in order to reduce workers' expected gain from quitting. If training is both general and firm-specific, overinvestment in firm-specific training will result.
U2 - 10.57938/524ce72e-f973-407b-afa0-277acf4ffa8f
DO - 10.57938/524ce72e-f973-407b-afa0-277acf4ffa8f
M3 - WU Working Paper and Case
T3 - Department of Economics Working Paper Series
BT - Cost-Sharing of General and Specific Training with Depreciation of Human Capital
PB - Inst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business
CY - Vienna
ER -