Does delegation increaase worker training?

Christos Bilanakos, John S. Heywood, John G. Sessions, Nikolaos Theodoropoulos

Research output: Contribution to journalArticle

Abstract

We model a principal-firm offering training to its agent-worker under two alternative organizational structures: integration, where the principal retains authority to overrule the investment project recommended by the worker; and delegation, where the principal cannot overrule the worker's preferred investment project. We assume that training reduces the worker's effort cost of assembling information about alternative projects' payoffs and identify the conditions under which delegation increases the profit-maximizing intensity of training. Empirical estimates from matched employer–employee data show that workplaces delegating authority do provide more worker training. This result persists in two cross sections, in panel fixed-effect estimates and, critically, in an instrumental variable exercise that also controls for establishment fixed effects. (JEL D21, D22, D23, M53, M54).

Original languageEnglish
Pages (from-to)1089-1115
Number of pages27
JournalEconomic Inquiry
Volume56
Issue number2
DOIs
Publication statusPublished - 1 Apr 2018

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Delegation
Workers
Investment project
Authority
Fixed effects
Organizational structure
Profit
Exercise
Instrumental variables
Matched employer-employee data
Work place
Costs
Cross section

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

Cite this

Bilanakos, C., Heywood, J. S., Sessions, J. G., & Theodoropoulos, N. (2018). Does delegation increaase worker training? Economic Inquiry, 56(2), 1089-1115. https://doi.org/10.1111/ecin.12515

Does delegation increaase worker training? / Bilanakos, Christos; Heywood, John S.; Sessions, John G.; Theodoropoulos, Nikolaos.

In: Economic Inquiry, Vol. 56, No. 2, 01.04.2018, p. 1089-1115.

Research output: Contribution to journalArticle

Bilanakos, C, Heywood, JS, Sessions, JG & Theodoropoulos, N 2018, 'Does delegation increaase worker training?', Economic Inquiry, vol. 56, no. 2, pp. 1089-1115. https://doi.org/10.1111/ecin.12515
Bilanakos C, Heywood JS, Sessions JG, Theodoropoulos N. Does delegation increaase worker training? Economic Inquiry. 2018 Apr 1;56(2):1089-1115. https://doi.org/10.1111/ecin.12515
Bilanakos, Christos ; Heywood, John S. ; Sessions, John G. ; Theodoropoulos, Nikolaos. / Does delegation increaase worker training?. In: Economic Inquiry. 2018 ; Vol. 56, No. 2. pp. 1089-1115.
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