This paper explores the relationship between wage structures and investment in general training, particularly in the context of imperfect labor markets. The authors argue that when labor market frictions compress the wage structure, firms may invest in general skills of their employees because these skills become "specific" within the firm. They find that labor market institutions, such as minimum wages and union wage setting, play a crucial role in shaping the wage structure and, consequently, the level of training investment. The paper suggests that more regulated labor markets in Europe and Japan may lead to higher firm-sponsored general training compared to the U.S. The authors also analyze various mechanisms that can distort the wage structure, including minimum wages, union wage setting, search and monopsony, asymmetric information, and efficiency wages. They provide theoretical and empirical evidence to support their findings, highlighting the importance of labor market institutions in influencing human capital accumulation.This paper explores the relationship between wage structures and investment in general training, particularly in the context of imperfect labor markets. The authors argue that when labor market frictions compress the wage structure, firms may invest in general skills of their employees because these skills become "specific" within the firm. They find that labor market institutions, such as minimum wages and union wage setting, play a crucial role in shaping the wage structure and, consequently, the level of training investment. The paper suggests that more regulated labor markets in Europe and Japan may lead to higher firm-sponsored general training compared to the U.S. The authors also analyze various mechanisms that can distort the wage structure, including minimum wages, union wage setting, search and monopsony, asymmetric information, and efficiency wages. They provide theoretical and empirical evidence to support their findings, highlighting the importance of labor market institutions in influencing human capital accumulation.