BIROn - Birkbeck Institutional Research Online

    Is wage compression a necessary condition for firm-financed general training?

    Booth, A.L. and Zoega, Gylfi (2004) Is wage compression a necessary condition for firm-financed general training? Oxford Economic Papers 56 (1), pp. 88-97. ISSN 0030-7653.

    Full text not available from this repository.

    Abstract

    In recent contributions, Acemoglu and Pischke argue that wage compression induces firms to invest in general training. However, they consider only absolute wage compression. We extend their approach to consider relative wage compression and argue that wage compression as generally understood in the literature is of the latter type. We show that factors associated with an increase in the absolute difference between output and wages might have no effect on the ratio of output and wages (e.g., if the output and wage of every worker doubles, there is absolute wage compression but not relative wage compression). Importantly, we show that, although relative wage compression is not a necessary condition for firms’ willingness to pay for general training, it does increase firms’ incentives to pay for workers’ general training. We show that the departure from the competitive framework highlighted in Acemoglu and Pischke is much more general than implied by their analysis.

    Metadata

    Item Type: Article
    School: School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Depositing User: Sarah Hall
    Date Deposited: 01 Dec 2020 16:45
    Last Modified: 01 Dec 2020 16:45
    URI: https://eprints.bbk.ac.uk/id/eprint/41718

    Statistics

    Downloads
    Activity Overview
    0Downloads
    18Hits

    Additional statistics are available via IRStats2.

    Archive Staff Only (login required)

    Edit/View Item Edit/View Item