Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy
Carl le Grand
On-the-job training, firm resources and unemployment risks: an analysis of the Swedish recession 1991-1993
Abstract: Two general questions are posed in this paper: (a) In what
ways do characteristics of the firm where the worker is employed have an
influence on the worker's risk to become unemployed? (b) How do general and
specific skills acquired in the firm affect the worker's unemployment risk?
The empirical analyses are based on three matched data sets: (i) survey
data from the 1991 Swedish Level of Living Survey on individual and job
related characteristics of the employees; (ii) register data on annual
economic reports of private firms; and (iii) register data from the
National Labor Market Board on registered unemployment.
findings are: First, the resources and economic situation of the firm
affect the workers' risks of becoming unemployed in several ways: The risks
are larger for workers employed in small-scale firms, in labor intensive
firms, in firms with small or negative profits, and/or in firms with a high
debt to equity ratio. Moreover, these firm-level effects do not seem to be
explained by the selection of productive, high capacity workers to
resourceful, capital intensive and productive firms.
Second, the effect
on unemployment risks of the acquisition of skills within the firm is
conditioned by the degree of transferability of such skills to other firms.
A worker with skills that are firm specific will not be better off than a
worker with relatively low job skills, while a worker with skills that can
be of use with other employers has much less unemployment risks.
Keywords: Unemployment risks; firm; (follow links to similar papers)
JEL-Codes: J21; (follow links to similar papers)
32 pages, May 17, 2000
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