Delayed Formal On-the-Job Training

Abstract

The fact that an employer and employee incur a loss when a trained worker changes jobs provides an incentive for on-the-job training to be selectively provided to workers who are less likely to change jobs. Consequently, if there is belated information about employees' future mobility, it may be optimal to delay training, even if doing so means forgoing the returns to training during the early part of the employment relationship. The training literature, however, assumes that training is concentrated at the beginning of the employment relationship. The authors of this paper examine the relationship between tenure and the probability of ever having received training using data from the Current Population Survey and the National Longitudinal Surveys of Youth. Their findings indicate that delayed formal training is the norm rather than the exception.

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