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The modern concept of labor hoarding emerged in early 1960s, and soon became a standard part of mainstream economists’ explanation of the working of labor markets. The concept represents the convergence of three important elements: an empirical finding that labor productivity was procyclical; a framing of this finding as a “puzzle” or anomaly for the basic neoclassical theory of the firm, and a proposed resolution of the puzzle based on optimizing behavior of the firm in the presence of costs of hiring, firing, and training workers. This paper recounts the history of each of these elements, and how they were woven together into the labor hoarding concept. Each history involves people associated with various research traditions and motivated by an array of questions, many of which were unrelated to the questions that the modern labor hoarding concept was ultimately created to address.

Human capital theory hypothesizes that no firm rationally invests in general job skills training because its competitors might hire the trained employees away before the firm could recoup its costs through higher worker productivity. Drawing from four explanatory perspectives, we developed several research hypotheses about the organizational and environmental sources of variation in company-provided job skills training for core employees, which we tested with a national sample of U.S. work establishments. Contrary to human capital theory expectations, the large majority of employers with core training programs reported providing skills that were either “to a great deal” or “to some extent” useful to other employers. Our general skills training analysis supported only one hypothesis, suggesting the inadequacy of human capital theory for explaining company training investments. We found evidence that the substantive contents of company job skills training programs differentiated into technical skills and social skills dimensions. Multivariate equations supported several hypothesized effects of organizational and environmental factors on the social and technical skills contents of company core training investments. We conclude with a reassessment of the classic general-specific job skills hypothesis and speculate about future directions for job skills training theory and research.

We use new training data from the British Household Panel Survey to explore the degree to which the data are consistent with the predictions of human capital theory. According to the raw data, most work-related training is general and is paid for by employers. Our fixed effects estimates reveal that employer-financed training is associated with higher wages both in the current and future firms, with some evidence that the impact in future firms is larger. These results are consistent with human capital theory with credit constraints, and with the relatively recent literature on training in imperfectly competitive labour markets.

We analyze the relationship between initial vocational education and training (VET) and training policies by looking at the ways and extent to which different approaches foster the acquisition of general and transferable skills. The factors that particularly affect the investment in training and the investment in transferable skills are analyzed both from the point of view of the individual and the employer. We argue that with the reform of their national training systems, Spain and the United Kingdom have followed different routes in order to foster precisely an increase in the investment on transferable skills. Those pathways differ in the extent to which policy strategies have aimed at reducing either individual worker or firms’ constraints to receive or invest in transferable training, and in the extent to which the emphasis for certification focused on “demonstrated learning outcomes” as opposed to “particular learning processes or places.” The paper concludes with the presentation of some policy implications.

This study proposes targeted modernization of the Department of Defense (DoD's) Joint Forces Ammunition Logistics information system by implementing the optimized innovative information technology open architecture design and integrating Radio Frequency Identification Device data technologies and real-time optimization and control mechanisms as the critical technology components of the solution. The innovative information technology, which pursues the focused logistics, will be deployed in 36 months at the estimated cost of $568 million in constant dollars. We estimate that the Systems, Applications, Products (SAP)-based enterprise integration solution that the Army currently pursues will cost another $1.5 billion through the year 2014; however, it is unlikely to deliver the intended technical capabilities.

This paper complements previous research on investment in firm-specific human capital by applying real options analysis. Our framework suggests that the parties receive valuable options to exit the contract when information becomes revealed in the future, but these options may be more valuable for one party than the other. Companies and workers attempt to reduce the value of the options through contractual mechanisms that either shift wealth to the party granting the option or prevent the option from being exercised. In both cases, the mechanisms cause the parties to invest in firm-specific capital, resulting in higher output and higher wages.