Performance Pay, Training and Labor Mobility

A. C. Gielen

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Abstract

Market imperfections may cause firms and workers to under-invest in specific training. This paper shows that profit sharing may be a suitable instrument to enhance specific training investments, either by enhancing wage °exibility or by increasing the returns to training. As a result, profit sharing not only increases productivity by means of an effort effect, but also by increased training investments. Furthermore, the results suggest that older workers' employability can be improved if a profit-related remuneration is paid.
Original languageEnglish
Place of PublicationTilburg
PublisherMacroeconomics
Number of pages28
Volume2007-48
Publication statusPublished - 2007

Publication series

NameCentER Discussion Paper
Volume2007-48

Keywords

  • profit-related pay
  • training
  • labor productivity
  • labor mobility

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  • Cite this

    Gielen, A. C. (2007). Performance Pay, Training and Labor Mobility. (CentER Discussion Paper; Vol. 2007-48). Macroeconomics.