Who pays for minor league training costs?

As an alternative to monopsonistic exploitation, the underpayment of players in major league baseball may be explained as the attempt by owners to recoup general training expenses. In this article, a method is proffered for estimating the 'surplus' extracted from those players restricted by the reserve clause, where this surplus is defined as the difference between what the player is actually paid and what he would have received if he were a free agent. These estimates are then used to examine how the surplus varies across players. The results suggest a number of interesting aspects of the recovery of minor league training costs, monopsony exploitation, and the distribution of the surplus across players. First, owners only extract a surplus from 'apprentices' (i.e., those young players who are ineligible for salary arbitration). Second, the largest surpluses are extracted from those who cost the least to train. In fact, the surplus generated by star apprentices is about twice that of mediocre apprentices. Finally, the results suggest that the surplus extracted from minority apprentices is 10–15% higher than that extracted from white apprentices.     

Firm-financed training: Firm-specific or general skills?

In this article we analyse the specificity and generality of firm-financed training in Norway. Compared to most other OECD countries Norway has a compressed wage structure. According to non-competitive theories of training we should expect to find much firm-sponsored training in such an economy, and furthermore we should expect to find relatively much firm-sponsored general training. The results in this paper suggest that firm-financed training in Norway contain much general skills. We find that training paid for by previous employers has a positive effect on current wages, and the effect is at least on par with the impact on wages from training paid for by the present employer. We use two methods to control for selection bias in training; an instrument variable (IV)-approach and a fixed-effect approach. The IV-approach suggests that the original training estimate is biased downward. However, our training variable may be subject to measurement error, and recent research has shown that the IV-estimate will be biased upward when a mismeasured variable is binary (as in our case). This finding receives support when using a fixed-effect approach. The IV-estimate for training considerably exceeds the fixed-effect estimate. The fixed-effect estimate is also lower than the original OLS-estimate indicating that some selection bias in training is present.First revision received: January 2002/Final revision received: October 2003The paper is financed by grant 108728/510 from the Norwegian Research Council. The financial support is gratefully acknowledged. The author thanks Erling Barth and Hege Torp at the Institute for Social Research, Yngve Willassen at the Department of Economics, University of Oslo, Håkan Regnér at the Swedish Institute for Social Research, two anonymous referees, and participants at the Seminar for education and labour market in Stavern June 2000 for valuable comments and suggestions. All remaining errors are my own     

Why do low-educated workers invest less in further training?

Several studies document that low-educated workers participate less often in further training than high-educated workers. This article investigates two possible explanations: low-educated workers invest less in training because of (1) the lower economic returns to these investments or (2) their lower willingness to participate in training. Controlling for unobserved heterogeneity, we find that the economic returns to training for low-educated workers are positive and not significantly different from those for high-educated workers. However, low-educated workers are significantly less willing to participate in training. We show that this lesser willingness to train is driven by economic preferences, and personality traits.     

Is firm-sponsored training a palliative? A common agency approach

We analyse the issue of firm-sponsored training under product market imperfections. In this setting, qualification becomes a public good for firms when their profits are increasing in the stock of skilled workers but remains a private good to students/workers. Students have to pay a tuition fee but at the same time firms sponsor education: universities sell training to both. We prove that the proportion of skilled workers is larger in more competitive economies/industries while the share of firms in the financing of training is a monotonically decreasing function of the degree of competition. An increase of the latter indeed increases the equilibrium skilled wage while reducing its sensitivity to an increase of the supply of skilled workers. The firms’ aggregate expenditures on training per worker are nevertheless a nonmonotonic function of the competitiveness of the economy.     

How do employee training and knowledge stocks affect product innovation?

The main purpose of this paper is to explore how interactions of knowledge flows and knowledge stocks could shape firms’ innovative performance. Knowledge flows are measured on the grounds of human resource training practices while different levels and forms of knowledge stocks (i.e. educational attainment, exporting activity, and firm age) are considered. We make use of two-period panel probit regressions and a rich data survey of the 524 largest Greek manufacturing firms conducted in two waves (2011 and 2013). Our findings suggest that the beneficial effects of knowledge flows strengthen when knowledge stocks accumulated by employees’ education and firm age are low. When knowledge stocks are limited, knowledge flows can act as a bridge for product innovation. On the contrary, when knowledge stocks are high, higher investments in knowledge flows may lead to diminishing returns and, thus, to decreased innovation performance beyond a certain point.     

Has the large firm training advantage declined during the 2000s?

The study examines data from the Survey of Income and Program Participation (SIPP) and finds a falling incidence of job training in the United States during the period between 2001 and 2009. It also reveals that the firm size-training advantage in which larger firms are more likely to provide employer-paid training than their smaller counterparts has diminished. For the workforce overall, 34.5 percent (for males) to 25.4 percent (for females) of the difference in training between 2001 and 2009 is attributable to a decline in the large firm training advantage. For younger prime-age workers, the falling firm size-training effect is an even larger part of the overall decline in training, amounting to 51.8 percent of the difference in training between 2001 and 2009 for males and 33.9 percent for females.     

Déjà Vu? Short-term training in Germany 1980–1992 and 2000–2003

Short-term training has recently become the largest active labor market program in Germany regarding the number of participants. Little is known about the effectiveness of different types of short-term training, particularly their long-run effects. This paper estimates the effects of short-term training programs in West Germany starting in the time periods 1980–1992 and 2000–2003 on the three outcomes employment, earnings, and participation in long-term training programs. We find that short-term training shows mostly persistently positive and often significant employment effects. Short-term training focusing on testing and monitoring search effort shows slightly smaller effects compared to the pure training variant. The lock-in periods lasted longer in the 1980s and 1990s compared to the early 2000s. Short-term training results in higher future participation in long-term training programs.     

Does computer-based training impact maintenance costs and actions? An empirical analysis of the US Navy’s AN/SQQ-89(v) sonar system

The United States Navy decided in the early 2000s to replace traditional, instructor-led schoolhouse training with computer-based training (CBT). While employing CBT may produce gains in knowledge acquisition and lower costs for repetitive, low-skill work, there is a lack of empirical evidence whether these benefits exist for more highly skilled Navy operations. Anecdotal evidence suggests that CBT failed to sufficiently prepare new sailors for sophisticated systems’ maintenance and operation. To determine the validity of this evidence, we examine how CBT has affected the AN/SQQ-89(v) sonar. We empirically analyse whether the Navy’s introduction of CBT significantly altered fleet maintenance costs, actions and training requirements, by assembling a unique data set of ships, locations, personnel, maintenance costs and maintenance actions. Controlling for the Navy’s plan to man the system, the number of authorized billets and the number of personnel on board, we find that CBT adversely impacts costs, actions and maintenance hours for the sonar system.