Abstract

In recent years various theoretical contributions have taken up the economic analysis of training by introducing substantial innovations with respect to Becker's original model. In the case of a perfectly competitive labour market, where completely general skills, perfect labour mobility and a large number of firms determine a fierce competition on the demand side, wage must equate productivity. This is the case of general training as analysed by Becker, where there is no incentive for the firms to invest in training. On the contrary, there is enough evidence showing that, despite the predictions of the Becker's model, firms substantially invest in workers' general training. Standard theory tries to rationalise the investment of firms in general training as a consequence of situations in which workers are prevented from paying for training by credit constraints and/or wage rigidities but it is only the non-competitive approach that fully explains the firms' behaviour. The basic hypothesis common to the new models is the imperfect competitive condition of the labour market. The two main findings are, on the one hand, the possibility that firms can be motivated to invest in general training for workers and, on the other, the prediction that the market will nonetheless fail to provide efficient levels of training. By this way theory and empirical evidence are reconciled. This paper introduces the non-competitive theory of training investments and surveys the most interesting models based on the assumptions of 'transferable' skills, low labour mobility, asymmetric information on acquired skills, asymmetric information on individual abilities, collective wage bargaining, skills certification. Moreover, the findings from first empirical tests are considered and policy implications are derived.