Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2002-09-23 Number: 02-090/3 Author-Name: Edwin Leuven Author-Email: e.leuven@uva.nl Author-Workplace-Name: University of Amsterdam Author-Name: Hessel Oosterbeek Author-Email: h.oosterbeek@uva.nl Author-Workplace-Name: University of Amsterdam Author-Name: Randolph Sloof Author-Email: r.sloof@uva.nl Author-Workplace-Name: University of Amsterdam Author-Name: Chris van Klaveren Author-Workplace-Name: University of Amsterdam Title: Worker Reciprocity and Employer Investment in Training Abstract: Standard economic theory predicts that firms will not invest in general training and will underinvest in specific training. Empirical evidence, however, indicates that firms do invest in general training of their workers. Evidence from laboratory experiments points to less underinvestment in specific training than theory predicts. We propose a simple model in which a firm invests the socially optimal amounts in general and specific training if the worker is sufficiently motivated by reciprocity. A reciprocal worker may be willing to give the firm a full return on its investment. We present empirical evidence that supports the proposed mechanism. Workers with a high sensitivity to reciprocity have 15% higher training rates than workers with a low sensitivity to reciprocity.

See publication in Economica, 2005, 72(285), 137-149. Classification-JEL: J41 Keywords: Training; Reciprocity File-Url: https://papers.tinbergen.nl/02090.pdf File-Format: application/pdf File-Size: 85393 bytes Handle: RePEc:tin:wpaper:20020090