Journal of Population Economics

, Volume 20, Issue 2, pp 329–357 | Cite as

Who should invest in specific training?

  • Hessel Oosterbeek
  • Randolph Sloof
  • Joep Sonnemans
Original Paper

Abstract

We study experimentally whether employers or workers should invest in specific training. Workers have an alternative trading opportunity that takes the form of either an outside option or a threat point. Theory predicts that with outside options, employers have (weakly) better investment incentives than workers do and should therefore be the investing party. With threat points, employers and workers are predicted to invest the same. Our results are, by and large, in line with these predictions. Due to offsetting inefficiencies in the bargaining stage, however, realized inefficiencies are remarkably similar across the different situations considered.

Keywords

Specific training Investments Experiments 

JEL classification

J41 J24 C91 

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Copyright information

© Springer-Verlag 2005

Authors and Affiliations

  • Hessel Oosterbeek
    • 1
  • Randolph Sloof
    • 1
  • Joep Sonnemans
    • 1
  1. 1.Department of EconomicsUniversity of AmsterdamAmsterdamThe Netherlands

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