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Atsuko Tanaka and Hsuan-chih Lin
''Employee Investment and Screening based on Labor Force Attachment''
( 2020, Vol. 40 No.2 )
This paper studies firms' employee investment decisions based on labor force attachment under a screening model. We first characterize the conditions for pooling/separating equilibria and analyze the associated inefficiency. We find that strengthening the worker's labor force attachment does not always improve social welfare because it may lead to over-investment. The implications help us better understand the contributing factors to the gender wage gap since average job turnover rate is higher among women than men.
Keywords: Labor Force Attachment, Screening Mechanism, Wage Contracts, Employee Training
JEL: J3 - Wages, Compensation, and Labor Costs: General
J7 - Labor Discrimination: General
Manuscript Received : Jul 19 2019 Manuscript Accepted : May 15 2020

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