Why do temporary help firms provide free general skills training?

The majority of U.S. temporary help supply (THS) firms offer nominally free , unrestricted computer skills training, a practice inconsistent with the c ompetitive model of training. I propose and test a model in which firms off er general training to induce self-selection and perform screening of worke r ability. The model implies, and the data confirm, that firms providing tr aining attract higher ability workers yet pay them lower wages after traini ng. Thus, beyond providing spot market labor, THS firms sell information ab out worker quality to their clients. The rapid growth of THS employment sug gests that demand for worker screening is rising.