Labor market, as any market, is driven by competition, as a component of its structure. The creative and innovative capaticies and competences of people enter into trial, and they will be encouraged to seek better professional training, to develop their talent and skills, to promote innovation....

We present a model where firms compete for scarce managerial talent ("alpha") and managers are risk-averse. When managers cannot move across firms after being hired, employers learn about their talent, allocate them efficiently to projects and provide insurance to low-quality managers. When...