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4Both the indirect and direct costs are relevant in the analysis, theres a tendency to think of opportunity cost with OJT and direct costs with SCHOOLING, in fact, both are relevant in both cases. GENERAL TRAINING: and income maximization implies; a) firms do not pay training costs but do pay the market wage, b) if firm does pay training costs>>>high demand for training and high labor costs, c) firms not paying marginal product to trained workers will have a hard time hiring or keeping trained workers, and d) firms pay training costs and less than marginal product find themselves in the worst possible world, with high costs and difficulty in keeping workers (with military as classic example). IMPLICATIONS: a) MPo; opportunity cost wages may differ from actual Marginal product in the initial period, and wages will be greater than Marginal product if there are forgone earnings due to training, b) wage will be LESS than Marginal Product after training That is, wages dont have to ever eq
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