Kiel Working Papers, Kiel Institute for World Economics
No 1452:
Firm Training and Wage Rigidity
Wolfgang Lechthaler
Abstract: Although wage rigidity is among the most prominent
subjects in modern economics, its effects on wage compression and firm
training have thus far not been considered. This paper is trying to bridge
this gap by using a simple two period model which can still by analyzed
analytically. I am able to show that wage rigidity increases wage
compression. However, contrary to previous work this is not sufficient to
increase firms' training investments. The reason lies in the endogeneity of
separations, which become more frequent
Keywords: Human Capital, Wage Rigidity, Training; (follow links to similar papers)
JEL-Codes: J24,; J31,; M53; (follow links to similar papers)
37 pages, October 2008
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