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Who pays for job training?

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  • Anurag Banerjee
  • Parantap Basu

Abstract

This paper addresses a puzzle in the UK labour market. Why is not there enough investment in job training when there is a high skill premium? We model this as a coordination game between firms and workers. Using a social planning model as a baseline, the paper demonstrates that while it is socially beneficial to invest in job training, the private sector may fail to internalize these benefits in a wide range of economies. The chance of this coordination failure is greater in economies with a higher inequality in the skill distribution and a higher rate of time preference.Creation-Date: 2008-11

Suggested Citation

  • Anurag Banerjee & Parantap Basu, 2008. "Who pays for job training?," CDMA Conference Paper Series 0802, Centre for Dynamic Macroeconomic Analysis.
    • Handle: RePEc:san:cdmacp:0802
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    File URL: https://www.st-andrews.ac.uk/CDMA/papers/cp0802.pdf
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