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(i) In the model of on-the-job training, explain the distinction between general and specific training

Economics Feb 06, 2022

(i) In the model of on-the-job training, explain the distinction between general and specific training.
Using this model explain why on-the-job training investment may be inefficiently low and how this
problem might be resolved in practice. (ii) In the paper by Amanda Pallais (2014), "Inefficient hiring
in entry-level labour markets" why might firms hire inefficiently low numbers of entry-level workers
and why might they underinvest in general skills training? Explain in detail the field experiment
implemented by the author and her key findings. In your answer describe the experimental research
design, including the treatment and control groups, the kind of data used for the analysis, the main
results and potential implications for firms and policy makers.

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