Skills shortages have developed in certain fields and regions in recent years. Earnings premiums for people in some professions, notably health, engineering and skilled trades have increased. And vacancy rates have risen for skilled trades, with the increase being particularly large in Alberta...

This paper looks at the effect of quitting on the number of workers trained under conditions of uncertainty about future productivity when workers have both firm-specific and industry-specific skills. A new effect is found which works in the opposite direction to the undertraining result of...

This paper derives a model in which workers have firm-specific and industry-specific skills, and in each period there is a non-zero probability that a worker quits. This makes the private discount factor, used by firms in making decisions about hiring and training new workers and firing existing...

Improving education outcomes is vital for achieving convergence with GDP per capita levels in Western European countries and for reducing income inequality. While some education outcomes are favourable, such as the low secondary-school drop-out rate, others have room for improvement: education...

Improving education outcomes is important for Germany’s long-term economic performance and social cohesion. While student achievement is above the OECD average in science and at the OECD average in reading and mathematics according to the 2006 OECD PISA study, weaker students tend to do badly...

Improving education achievement in Luxembourg is a priority for strengthening productivity growth and enhancing residents. employment prospects in the private sector, where employers mainly hire cross-border workers. Student achievement in Luxembourg is below the OECD average according to the...

We investigate two dimensions of investment in general human capital on-the-job: the number of workers trained and the intensity of training for each worker. In the benchmark case, we consider wage and training decisions made by firms in an imperfectly competitive labour market. The benchmark...

This Paper provides microfoundations for wage compression by modelling wage-setting in a world of heterogeneous workers and firms. Workers are differentiated by observable innate ability. A high-ability worker confers on a firm an externality, since their ability raises the average level of...

Macroeconomic shocks and labour-market institutions jointly determine employment growth and economic performance. The effect of shocks depends on the nature of these institutions and the effect of institutional change depends on the macroeconomic environment. It follows that a given set of...

We develop a model demonstrating conditions under which firms will invest in the general training of their workers, and show that firms’ incentives to invest in general training are increasing in task complexity. Workers’ heterogeneous observable innate ability affects the variety of tasks...