What determines ａ worker's skilllevel? l build a model that emphasizes strategic interactions between workers and firms.　Suppose a worker invests in skills corresponding to ａ specific technology, denoted Z. In a situation where wage determination occurs through bilateral bargaining, the worker is unable to extract her entire marginal product. Rather the worker's bargaining power and, hence, her compensation depend on the number of firms with technology たAn increase in the number of potential employers raises the fraction of the marginal product captured by the worker and encourages skill development. In my model, the technology adoption decisions of firms and the skillacquisition decisions of workers are jointly determined. The model shows that in equilibrium, all firms adopt the same technology.　Howeverけhis equilibrium allocation is generally inefficient.