TY  - JOUR
AU  - Acemoglu,Daron
AU  - Pischke,Jorn-Steffen
TI  - Why Do Firms Train? Theory and Evidence
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5605
PY  - 1996
Y2  - June 1996
UR  - http://www.nber.org/papers/w5605
L1  - http://www.nber.org/papers/w5605.pdf
N1  - Author contact info:
Daron Acemoglu
Department of Economics
MIT, E52-380B
50 Memorial Drive
Cambridge, MA  02142-1347
Tel: 617/253-1927
Fax: 617/253-1330
E-Mail: daron@mit.edu

Jorn-Steffen Pischke
CEP
London School of Economics
Houghton Street
London WC2A 2AE
UNITED KINGDOM
Tel: 44-20-7955-6509
Fax: 44-20-7955-7595
E-Mail: s.pischke@lse.ac.uk
AB  - This paper offers and tests a theory of training whereby workers do not pay for general training they receive.  The crucial ingredient in our model is that the current employer has superior information about the worker's ability relative to other firms. This informational advantage gives the employer an ex post monopsony power over the worker which encourages the firm to provide training. We show that the model can lead to multiple equilibria.  In one equilibrium quits are endogenously high, and as a result employers have limited monopsony power and are willing to supply only little training, while in another equilibrium quits are low and training high.  We also derive predictions from our model not shared by other explanations of firm sponsored training.  Using microdata from Germany, we show that the predictions of the specific human capital model are rejected, while our model receives support from the data.
ER  -