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Discussion Paper Details

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Title: The Structure of Wages and Investment in General Training

Author(s): Daron Acemoglu and Jörn-Steffen Pischke

Publication Date: March 1998

Keyword(s): firm sponsored training, General Human Capital and Imperfect Labour Markets

Programme Area(s): Human Resources and International Macroeconomics

Abstract: In the standard model of human capital with perfect labor markets, workers pay for general training. When labor market frictions compress the structure of wages, firms may invest in the general skills of their employees. The reason is that the distortion in the wage structure turns ``technologically'' general skills into ``specific'' skills. Labor market frictions and institutions, such as minimum wages and union wage setting, are crucial in shaping the wage structure, and thus have an important impact on training. Our results suggest that the more frictional and regulated labor markets in Europe and Japan may generate more firm-sponsored general training than the U.S.

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Bibliographic Reference

Acemoglu, D and Pischke, J. 1998. 'The Structure of Wages and Investment in General Training'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1833