The gains from general training in human capital tend to go to the: A. employing

Question

The gains from general training in human capital tend to go to the: A. employing firm and not to the individual. B. federal government in the form of higher taxes. C. individual and not to the employing firm. D. parents since they paid for the education in the first place.

The extra wage that is paid to an individual to attract him/her to a less desirable job is called: A. the benchmark competitive wage. B. the general training human capital difference. C. the specific training human capital difference. D. a compensating wage differential.

Explanation / Answer

C. Individual and not to the employing firm.

(Workers pay much of the costs of technical general training and receive much of the benefits. Firms will provide general training only if they do not have to pay any of the costs).

D. A compensating wage differential.

(It is an additional amount of income offered to a worker in order to motivate him to accept a given unacceptable job relative to other jobs that worker could perform).

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