Booth, Alison L and Zoega, Gylfi (1996) Quitting Externalities with Uncertainty about Future Productivity. Working Paper. C.E.P.R. Discussion Papers.
Booth, Alison L and Zoega, Gylfi (1996) Quitting Externalities with Uncertainty about Future Productivity. Working Paper. C.E.P.R. Discussion Papers.
Booth, Alison L and Zoega, Gylfi (1996) Quitting Externalities with Uncertainty about Future Productivity. Working Paper. C.E.P.R. Discussion Papers.
Abstract
This paper looks at the effect of quitting on the number of workers trained under conditions of uncertainty about future productivity when workers have both firm-specific and industry-specific skills. A new effect is found which works in the opposite direction to the undertraining result of Stevens (1994, 1995): A high quit rate makes investment in training less irreversible in the presence of firing costs and hence also less risky. This effect makes firms start hiring new workers at a lower level of productivity and hire more workers for a given increase in productivity. A rise in the quit rate can now either decrease or increase the number of trained workers.
Item Type: | Monograph (Working Paper) |
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Uncontrolled Keywords: | Quitting Externalities; Uncertainty; Under-investment |
Subjects: | H Social Sciences > HB Economic Theory |
Divisions: | Faculty of Social Sciences > Economics, Department of |
Depositing User: | Jim Jamieson |
Date Deposited: | 18 Jul 2012 10:34 |
Last Modified: | 18 Jul 2012 10:34 |
URI: | http://repository.essex.ac.uk/id/eprint/3191 |