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Originally Posted by Happy Days  I know the worth of human capital and that specific human capital can be very useful to employers who seek that person's specific knowledge and skill. Therefore, it is to the advantage of employers to cultivate employees and train them from general human capital to specific human capital. |
You've gone a snip wonky! The difference between specific and general training is that the latter empowers the worker (i.e. the worker can jump ship and acquire the full value of the training via a higher wage at a different firm). We essentially have a 'free market' problem generated by imperfect contracting (i.e. the employer has little incentive to provide training unless he can force the worker to stay put).
Britain suffered the full consequences of labour market flexibility. The 'free market', by encouraging low wage and temporary labour, further hampered the demand for skills investment.