Market imperfections may cause firms and workers to under-invest in specific training. This paper shows that profit sharing may be a suitable instrument to enhance specific training investments, either by enhancing wage flexibility or by increasing the returns to training. As a result, profit...

Over the past 30 years, participation in Further Education (FE) in England has been markedly counter-cyclical. What is more, it has yet to increase beyond the peak of 70% reached in 1993, much to the concern of policy-makers. An obvious explanation for these facts is the availability of labour...