NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Training Contracts, Employee Turnover, and the Returns from Firm-sponsored General Training

Mitchell Hoffman, Stephen V. Burks

NBER Working Paper No. 23247
Issued in March 2017
NBER Program(s):Law and Economics, Labor Studies, Public Economics, Political Economy, Productivity, Innovation, and Entrepreneurship

Firms may be reluctant to provide general training if workers can quit and use their gained skills elsewhere. “Training contracts” that impose a penalty for premature quitting can help alleviate this inefficiency. Using plausibly exogenous contractual variation from a leading trucking firm, we show that two training contracts significantly reduced post-training quitting, particularly when workers are approaching the end of their contracts. Simulating a structural model, we show that observed worker quit behavior exhibits aspects of optimization (for one of the two contracts), and that the contracts increased firm profits from training and reduced worker welfare relative to no contract.

download in pdf format
   (248 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w23247

Users who downloaded this paper also downloaded* these:
Hoffman and Burks w23240 Worker Overconfidence: Field Evidence and Implications for Employee Turnover and Returns from Training
Wiswall and Zafar w22173 Preference for the Workplace, Human Capital, and Gender
Bandiera, Hansen, Prat, and Sadun w23248 CEO Behavior and Firm Performance
Acevedo, Cruces, Gertler, and Martinez w23264 Living Up to Expectations: How Job Training Made Women Better Off and Men Worse Off
Hvide and Oyer w24198 Dinner Table Human Capital and Entrepreneurship
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us