Intra-firm wage compression and cost coverage of training : evidence from linked employer-employee data ; conference paper/ Pfeifer, Christian

This paper uses German linked employer-employee data in order to estimate the impact of intra-firm wage dispersion on the probability that firms pay for continuous training. About half of all firms in the estimation sample cover all direct and indirect training costs, which contradicts the standard human capital approach with perfect labor markets. The main finding of my cross-section, panel, and instrumental variable Probit estimations is that firms with larger intra-firm wage compression are indeed more likely to cover all direct and indirect training costs, which is consistent with theoretical considerations of the "new training literature" about imperfect labor markets.