Quality competition and worker training |
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| Authors: | John S. Heywood John G. Sessions Nikolaos Theodoropoulos |
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| Affiliation: | 1. Department of Economics, University of Wisconsin-Milwaukee, Milwaukee, Wisconsin, USA;2. Department of Economics, Newcastle University, Newcastle upon Tyne, UK;3. Department of Economics, University of Cyprus, Nicosia, Cyprus |
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| Abstract: | We examine the relationship between firm-sponsored training and product quality competition within a model of worker–firm bargaining. We develop a quality-adjusted monopolistically competitive setting in which firms invest in training to an extent that reflects: (i) the costs of training, (ii) the extent to which training increases product quality, and (iii) the extent to which product quality increases final product demand. We identify the conditions under which greater sensitivity between product demand and quality results in greater firm-sponsored training. |
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| Keywords: | competition product quality training |
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