Does Less Wage Compression Lead to Less Training in Germany? An Expansion of Acemoglu and Pischke's Model of Training in Imperfect Labor Markets

Renate Neubäumer ()
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Renate Neubäumer: University of Koblenz-Landau

No 9813, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We expand Acemoglu and Pischke's seminal model of training in imperfect labor markets by including the system of collective wage bargaining and the components of firms' training costs. Thus we can adapt their model to institutional changes that occurred since the 1990s. The model and the empirical developments we present show that firms compensate lower returns of apprenticeship training by changing training procedures towards more training at the work place and thus by decreasing net training costs. Therefore, more decentralized wage bargaining does not result in a reduction of firms' supply of training positions.

Keywords: apprenticeship training; training in imperfect labor markets; wage compression (search for similar items in EconPapers)
JEL-codes: I21 J24 J31 J52 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2016-03
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