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A growing body of economic literature indicates that the labor market operates to match workers with particular skills to firms in which those skills are needed. Because of the importance of monitoring costs and of efficiencies that result from the routinization of production when producing large standardized volumes of output, large firms tend to provide firm-specific training. Small firms, on the other hand, can more easily adjust output between product lines and the volume of output itself; the skills required to facilitate such adjustments tend to be learned through general training. Thus the question of whether workers receive more on-the-job training at large firms or at small ones can only be resolved by analyses of empirical data. It is this question that is the subject matter of our study.
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