Consider a firm that experiences an unexpected decline in demand for its output, the rest of the economy being unaffected. The marginal product of employees without specific training—such as untrained or generally trained employees—presumablyequaled wages initially, and their employment would now be reduced to prevent their marginal productivity from falling below wages. The marginal product of specifically trained employees initially would have been greater than wages. A decline in demand would reduce these marginal products too, but as long as they were reduced by less than the initial difference with wages, firms would have no incentive to lay off such employ. ees. For sunk costs are sunk, and there is no incentive to lay off employees whose marginal product is greater than wages, no matter how unwise it was, in retrospect, to invest in their training. Thus workers with specific training seem less likely to be laid off as a consequence of a decline in demand than untrained or even generally trained workers.