On-the-job training and labor market competition

Thomas Le Barbanchon (Bocconi University) En coautoría con Abi Adams and Alberto Marcato.

In this paper, we provide a new set of stylized facts on firm provision of on-the-job training and labor market competition. We take a supervised machine learning approach to identify offers of training from job vacancy text. Around 26% of job posts offer on-the-job training. Using an IV strategy, we find that competition reduces training offers. Decreasing labor concentration by one standard deviation decreases training by 5 to 10%. This suggests that direct positive competition effects through workers’ benefits are outweighed by negative effects on firms investment in workers human capital due to higher turnover. Indeed, we find that industries where competition increases turnover more have also larger training reduction due to competition. 

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