Journal ArticleDOI
A framework for understanding differences in labor turnover and human capital investment
Chang Chun,Yijiang Wang +1 more
Reads0
Chats0
TLDR
This paper analyzed the causes and the welfare consequences of international differences in labor turnover and human capital investment and found that a high turnover equilibrium is superior in the Pareto sense to a low turnover equilibrium if matching uncertainty is large.Abstract:
We analyze the causes and the welfare consequences of international differences in labor turnover and human capital investment. The framework incorporates different views as special cases. Conditions are identified under which multiple equilibria or differences in deep economic parameters explain the observed differences in labor practices. We show that when there is an informational problem regarding job-changing workers' quality, general human capital, like firm-specific human capital, can also affect labor turnover, and that better job matching is obtained at the expense of lower human capital investment. Given multiple equilibria, a high turnover equilibrium is found superior in the Pareto sense to a low turnover equilibrium if matching uncertainty is large. The reverse is true when matching uncertainty is small.read more
Citations
More filters
Book Chapter
Social protection and the formation of skills: a reinterpretation of the welfare state
TL;DR: The authors argue that workers will only make such risky investments when they have some insurance that their job or income is secure, otherwise, they will invest in general, and therefore portable, skills.
Posted Content
Why Do Firms Train? Theory and Evidence
TL;DR: In this article, a theory of training whereby workers do not pay for general training they receive is proposed, where the current employer has superior information about the worker's ability relative to other firms, which gives the employer an ex post monopsony power over the worker which encourages the firm to provide training.
ReportDOI
Why do firms train? : theory and evidence
TL;DR: In this article, a theory of training whereby workers do not pay for the general training they receive is proposed, where the superior information of the current employer regarding its employees' abilities relative to other firms creates ex post monopsony power, and encourages this employer to provide and pay for training, even if these skills are general.
Journal ArticleDOI
Human Capital Investment under Asymmetric Information: The Pigovian Conjecture Revisited
Chun Chang,Yijiang Wang +1 more
TL;DR: In this paper, the authors investigate how human capital investment, labor turnover, and wages are jointly determined when the current employer knows more about a worker's productivity than potential employers, and they show that the information asymmetry can cause an externality distortion in human-CAP investment because higher productivity due to the investment may not be recognized by the market.
Journal ArticleDOI
The Economics of Private Sector Training: A Survey of the Literature
TL;DR: A survey of existing theoretical work on on-the-job training can be found in this article, where the theoretical models focus on investment efficiency, finance, and turnover of private sector training.
References
More filters
Journal ArticleDOI
The Bargaining Problem
TL;DR: In this paper, a new treatment is presented of a classical economic problem, one which occurs in many forms, as bargaining, bilateral monopoly, etc It may also be regarded as a nonzero-sum two-person game in which a few general assumptions are made concerning the behavior of a single individual and of a group of two individuals in certain economic environments.
Journal ArticleDOI
Property Rights and the Nature of the Firm
Oliver Hart,John Moore +1 more
TL;DR: In this article, the authors provide a framework for addressing the question of when transactions should be carried out within a firm and when through the market, by identifying a firm with the assets that its owners control.
Journal ArticleDOI
Layoffs and Lemons
Robert Gibbons,Lawrence F. Katz +1 more
TL;DR: The authors provided theoretical and empirical analyses of an asymmetric-information model of layoffs and showed that when firms have discretion with respect to whom to lay off, the market infers that laid-off workers are of low ability.
Journal ArticleDOI
Job Assignments, Signalling, and Efficiency
TL;DR: This article analyzed a model in which information about a worker's ability is only directly revealed to the firm employing the worker; other firms, however, use the worker's job assignment as a signal of ability.