Jump to ContentJump to Main Navigation
Show Summary Details
More options …

The B.E. Journal of Macroeconomics

Editor-in-Chief: Cavalcanti, Tiago / Kambourov, Gueorgui

Ed. by Abraham, Arpad / Carceles-Poveda , Eva / Debortoli, Davide / Lambertini, Luisa / Nimark, Kristoffer / Wang, Pengfei

2 Issues per year


IMPACT FACTOR 2017: 0.378
5-year IMPACT FACTOR: 0.462

CiteScore 2017: 0.62

SCImago Journal Rank (SJR) 2017: 0.553
Source Normalized Impact per Paper (SNIP) 2017: 0.605

Online
ISSN
1935-1690
See all formats and pricing
More options …

The Impact of Aggregate and Sectoral Fluctuations on Training Decisions

Vincenzo Caponi
  • 1Ryerson University, Institute for the Study of Labor, and The Rimini Center for Economic Analysis,
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
/ Burc Kayahan / Miana Plesca
Published Online: 2010-10-14 | DOI: https://doi.org/10.2202/1935-1690.2117

The literature on training has pointed out that macroeconomic fluctuations can have a positive or a negative effect on training decisions. On the one hand, the opportunity cost to train is lower during downturns, and thus training should be counter-cyclical. On the other hand, a positive shock may be related to the adoption of new technologies and increased returns to skill, making training incidence pro-cyclical. The first contribution of this paper is to document, using the Canadian panel of Workplace and Employee Survey (WES), that (i) training moves counter-cyclically with aggregate output fluctuations (more training in downturns), while at the same time (ii) the relative position of sectoral output has a positive impact on training decisions (more training in sectors doing relatively better). This second fact is novel and unexplored. Overall, the results show that the firms' decisions to train are quite complex; in order to fully understand them, one needs to take into account not only the change in aggregates, but also the relative position of each sector in the economy. The second contribution of the paper is to illustrate the mechanisms at work by incorporating training decisions into a standard Mortensen-Pissarides model. In the standard model, production takes place if workers' productivity is above a reservation threshold. In our extension, this threshold gets expanded into a whole interval within which production takes place if workers are trained. The quantitative analysis from the calibrated model illustrates the counter-cyclical opportunity cost adjustment from aggregate shocks and the pro-cyclical adjustment coming from sectoral reallocation.

Keywords: training; human capital; business cycle; sectoral shocks

About the article

Published Online: 2010-10-14


Citation Information: The B.E. Journal of Macroeconomics, Volume 10, Issue 1, ISSN (Online) 1935-1690, DOI: https://doi.org/10.2202/1935-1690.2117.

Export Citation

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston.Get Permission

Citing Articles

Here you can find all Crossref-listed publications in which this article is cited. If you would like to receive automatic email messages as soon as this article is cited in other publications, simply activate the “Citation Alert” on the top of this page.

[2]
Tat-kei Lai and Travis Ng
Canadian Journal of Economics/Revue canadienne d'économique, 2014, Volume 47, Number 3, Page 856

Comments (0)

Please log in or register to comment.
Log in