Publication
Title
Job raiding raises human capital investments
Author
Abstract
This paper studies job raiding and its effect on incentives to invest in human capital. A firm can offer more attractive wages to new hires than to its current employees, thereby raiding a rivals workers. Our model shows that firms prefer to raid in equilibrium when given the opportunity to do so. As rational workers foresee that job raids increase expected job earnings, they are willing to increase their ex ante investment in human capital. This insight has important implications for any industry where human capital is a scarce input and important aspects of personnel output are observable. Examples include the publications of academic researchers, the performance of professional athletes, and lawsuits won by lawyers. Our conclusions indicate that limiting organizations freedom to offer higher wages to new hires vis-à-vis equally productive incumbent employees inhibits investments in human capital.
Language
English
Source (series)
Research paper / UA, Faculteit TEW ; 2004:5
Publication
Antwerp : UA, 2004
Volume/pages
47 p.
Full text (open access)
UAntwerpen
Faculty/Department
Research group
Publication type
Affiliation
Publications with a UAntwerp address
External links
Record
Identification
Creation 08.10.2008
Last edited 04.09.2013
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