Training and effort dynamics in apprenticeship

Drew Fudenberg, Luis Rayo

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

A principal specifies time paths of effort provision, task allocation, and knowledge transfer for a cash-constrained apprentice, who is free to walk away at any time. In the optimal contract the apprentice pays for training by working for low or no wages and by working inefficiently hard. The apprentice can work on both knowledge-complementary and knowledge-independent tasks. We study the optimal time path of effort distortions and their impact on the knowledge transfer, and analyze the effect of regulatory limits on the length of apprenticeships and on how much effort apprentices are allowed to provide.

Original languageEnglish (US)
Pages (from-to)3780-3812
Number of pages33
JournalAmerican Economic Review
Volume109
Issue number11
DOIs
StatePublished - Nov 2019

ASJC Scopus subject areas

  • Economics and Econometrics

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