Investment in General Training: The Role of Information and Labour Mobility
Following the seminal work of Becker (I964), it is widely accepted in the literature that firms will be unwilling to finance training which workers may use in other firms. This paper takes issue with this prediction and suggests that firms will frequently share in the cost of such general training.1 Becker argues that a firm which pays for the training of workers in skills of potential use to other firms will lose these workers: since other firms bear none of the costs of general training, they can attract a worker with such training by outbidding the firm which trained him. Recognising this absence of property rights over an investment in general training, firms will refuse to provide it. Hence, if general training is to take place, the trainee will have to pay for it. If potential trainees are unwilling or unable to pay, general training will not take place. A shortage in general training is likely to emerge; this may be especially pronounced in developing countries.2 In contrast, the outlook for