We present a new subgame perfect equilibrium in an infinitely repeated game, which has Basu's triadic model as the stage game. The payoff for the laborer is the same as in Basu's model. The equilibrium is more robust than the solution in Naqvi and Wemhoner in the sense that the equilibrium does...

An adverse selection model is analysed where firms can either train or hire a skilled worker. In equilibrium the market wage is determined by supply and demand.

Employment of apprentices seems to follow the business cycle. An interesting question is whether this is based on an investment policy where firms recruit when the labour market indicates skill shortage. Alternatively it may be that the firms are myopic and basically hire apprentices in booming...