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Worker heterogeneity, new monopsony, and training

Booth, A.L. and Zoega, Gylfi (2007) Worker heterogeneity, new monopsony, and training. Working Paper. University of Iceland, Reykjavík, Iceland.

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A worker's output depends not only on his/her own ability but also on that of colleagues, who can facilitate the performance of tasks that each individual cannot accomplish on his/her own. We show that this common-sense observation generates monopsony power and is sufficient to explain why employers might expend resources on training employees even when the training is of use to other firms. We show that training will take place in better-than-average or ‘good’ firms enjoying greater monopsony power, whereas ‘bad’ firms will have low-ability workers unlikely to receive much training.

Item Type: Monograph (Working Paper)
Keyword(s) / Subject(s): Firm-financed general training, worker heterogeneity, hierarchical assignment models, monopsony
School or Research Centre: Birkbeck Schools and Research Centres > School of Business, Economics & Informatics > Economics, Mathematics and Statistics
Depositing User: Administrator
Date Deposited: 08 Feb 2011 14:16
Last Modified: 17 Apr 2013 12:33

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