Information Advantages of Training Employers Despite Credible Training Certificates

We show that employers that invest in general human capital can positively select the employees they retain although training contents are transferable and visible to all employers (they are certified by credible external institutions). To solve the puzzle, we distinguish between soft and hard skills. Hard skills are tested in graded final exams and can be signalled to outside employers while soft skills are typically not tested and cannot be signalled. Therefore, the information advantage about soft skills can explain why employers keep a positive selection of training participants and invest in certified and transferable skills.