Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2004:15: The effects of wage compression on training: Swedish empirical evidence

Thomas Ericson ()
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Thomas Ericson: School of Economics and Commercial Law at Göteborg University, Department of Economics, Postal: Box 640, SE-405 30 Göteborg, Sweden

Abstract: This paper investigates the relation between workers’ on-the-job training activities and the degree of wage compression in their occupation. With respect to general training – as opposed to firm-specific training – human capital theory implies that the worker initiates and finances the training when there is a negative relationship. A positive relation between general training and wage compression, on the other hand, shows that the employer pays for and benefits from training. The empirical results show that the intensity of general training in Sweden decreases with wage compression. The paper also reveals differences between men and women.

Keywords: Wage compression; training

JEL-codes: J31

39 pages, November 23, 2004

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