Premium
TRAINING, TURNOVER, AND SEARCH*
Author(s) -
Quercioli Elena
Publication year - 2005
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.0020-6598.2005.00312.x
Subject(s) - wage , wage dispersion , economics , profitability index , microeconomics , value (mathematics) , set (abstract data type) , distribution (mathematics) , labour economics , dispersion (optics) , turnover , zero (linguistics) , efficiency wage , mathematics , finance , computer science , statistics , mathematical analysis , physics , management , optics , programming language , linguistics , philosophy
This article explores a model of firm‐specific training in a job search environment with labor turnover. The main substantive finding is a positive association between training and wages (when dispersed). The article then precisely characterizes how both wage dispersion and firm profitability depend on the flow value b ≥ 0 of workers' unmatched time. It is shown that: (i) for all high values b , no equilibrium exists; (ii) for intermediate values b , multiple equilibria arise, where firms earn zero profits, and choose from a general wage distribution; (iii) for all lower values b , there is a unique equilibrium, with firms earning positive profits, and choosing from an atomless set of wages.