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IFAU - Institute for Evaluation of Labour Market and Education Policy

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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Thomas Ericson, (2008), 'The effects of wage compression on training: Swedish empirical evidence', Applied Economics Letters, vol 15, no 3, pages 165-169

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