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Training contracts, employee turnover, and the returns from firm-sponsored general training

Author: Mitchell Hoffman; Stephen V Burks; National Bureau of Economic Research,
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2017.
Series: Working paper series (National Bureau of Economic Research), no. 23247.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
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  Read more...
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Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Mitchell Hoffman; Stephen V Burks; National Bureau of Economic Research,
OCLC Number: 978252927
Notes: "March 2017"
Includes online appendix (15 pages).
Description: 1 online resource (34 pages) : illustrations.
Series Title: Working paper series (National Bureau of Economic Research), no. 23247.
Responsibility: Mitchell Hoffman, Stephen V. Burks.

Abstract:

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.

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