On-the-job Training and Labor Market Concentration

In this paper, we provide a new set of stylised facts on firm provision of on-the-job training and labor market competition. We exploit job ad texts taking a supervised machine learning approach to identify training offers. We find that around 20% of US job posts offer on-the-job training, with an upward trend over the last decade. Training offers are positively correlated with local labor market concentration, a finding that is robust to an instrumental variables strategy based on the local differential exposure to national firm-level trends. Moving from the first to the third quartile of labor concentration increases training by almost 5%. We interpret our results through the lens of a directed search model where training acts to reduce the time to fill a vacancy and training has a greater expected benefit to the employer in less competitive labor markets given the lower separation rates