Ruhr Economic Papers

Ruhr Economic Papers #463

Local Employer Competition and Training of Workers

by Sylvi Rzepka and Marcus Tamm

RWI, 12/2013, 20 S./p., 8 Euro, ISBN 978-3-86788-523-2 DOI: 10.4419/86788523



The new training literature suggests that in a monopsonistic market employers will not only pay for firm-specific training but also for general training if the risk of poaching is limited. This implies that training participation should decrease when competition for employees is higher among firms. Using worker level data for Germany, we find that the hypothesis is supported empirically. Specifically, we find that employees are significantly less likely to participate in training if the density of firms in a sector is higher within the local labor market.

JEL-Classification: I24, J24, J42

Keywords: Training; local labor markets; monopsony

Published as:

Rzepka, S. and M. Tamm (2016), Local Employer Competition and Training of Workers. Applied Economics 48 (35): 3307-3321. DOI: 10.1080/00036846.2015.1137550