Scandinavian Working Papers in Economics
Working Paper Series,
Stockholm University, Swedish Institute for Social Research
No 4/2002: Does poaching distort training?
Espen R. Moen () and Åsa Rosén ()
Additional contact information
Espen R. Moen: Norwegian School of Management, Postal: Box 580, N-1302, Sandvika, Norway
Åsa Rosén: Swedish Institute for Social Research, Stockholm University, Postal: SE-106 91 Stockholm, Sweden
Abstract: We analyse the efficiency of the labour market outcome in a competitive search equilibrium model with endogenous turnover and endogenous general human capital formation. We show that search frictions do not distort training decisions if firms and their employees are able to coordinate efficiently, for instance, by using long-term contracts. In the absence of efficient coordination devices there is too much turnover and too little investments in general training. Nonetheless, the number of training firms and the amount of training provided are constrained optimal, and training subsidies therefore reduce welfare.
Keywords: Matching; Training; Poaching; Efficiency
39 pages, June 28, 2002
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