This chapter teaches readers to think about training both as a form of current compensation and as an investment in future pay (because training makes workers more productive, allowing them to earn more in the future). Training is a form of current pay because workers value training (precisely because it increases their future expected compensation) and, for that reason, they are willing to accept lower current compensation than they would receive in an alternative job that is otherwise the same but that does not offer training. This evokes compensating differentials (Chapter 3). The portability of training across firms is covered, as well as whether employees or employers should pay for training and whether the skills imparted by training are general (i.e., useful across many employers) or specific to the current employer. The internal rate of return (or breakeven interest rate) is covered in the context of whether it is profitable to train workers. Section 8.5, on practical applications, gives tips for how managers can obtain information on the key components of the training decision, i.e., employee productivity and expected tenure after training, costs, and the interest rate.