Should Firms be Required to Pay for Vocational Training?
Failure in the training market may result from credit constraints and the inability to insure against labour income uncertainty, deterring potential trainees, or labour market imperfections that create external benefits for firms. This paper constructs a model of a training market affected by both problems, and examines the rationale for training levy schemes, intended to make firms increase investment in vocational training. It is shown that regulating firms, or equivalently financing a subsidy through taxation of profits, can achieve a Pareto improvement irrespective of the cause of under-investment. However, when the levy is assessed as proportion of wages the effect is to address capital market imperfections only.
Year of publication: |
1999-01-01
|
---|---|
Authors: | Stevens, Margaret |
Institutions: | Department of Economics, Oxford University |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Human Capital and Competition: Strategic Complementarities in Firm-based Training
Stevens, Margaret, (2012)
-
Stevens, Margaret, (2002)
-
Wage-Tenure Contracts in a Frictional Labour Market: Firms Strategies for Recruitment and Retention
Stevens, Margaret, (2000)
- More ...