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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Globalization and General Worker Training
Organization Unit
Authors
  • Hans Gersbach
  • Armin Schmutzler
Language
  • English
Institution University of Zurich
Series Name Working paper series / Socioeconomic Institute
Number No. 403
Date 2004
Abstract Text We examine how globalization affects firms incentives to train workers. In our model, firms invest in productivity-enhancing worker training before Cournot competition takes place. When two separated product markets become integrated and are thus replaced with a market with greater demand and greater firm number, training by each firm increases provided the two countries are suffciently small. When barriers between large markets are eliminated, training is reduced. Similar results hold when firms in countries with different training systems face globalization of product markets. In particular, apprenticeship systems are threatened by a large-scale integration of product markets. Contrary to product market integration, labor market integration has no effect on training incentives.
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