335

Lars-Henrik Johansen

Transferable training and the collective action problem for employers

An analysis of further education and training in four Norwegian industries
Doctoral thesis

ISBN 82-7422-315-2
2000 377 p NOK 275,- Order no: 335 Order

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The potential significance of employers’ collective action for economic performance is widely acknowledged, but has not been complemented with corresponding theory-guided research on the probability of collective action and the conditions for effective action.

This thesis examines the nature of, the conditions for, and the consequences of employers’ collective action on further training, a crucial component of a successful high-skill strategy for industries and nations. The study addresses three core issues of labour economics: transferability of training, skill shortages, and sharing of training costs between employer and employees.

The enquiry builds on and adds to previous contributions that analyse transferable training as a collective good. It scrutinises the theoretical foundation and compares its implications with those of human capital theory. Finally, the empirical study of further education and training in four Norwegian industries is offered as a strategic test of these two alternative theories.

The collective action perspective shares core assumptions of human capital theory, but integrates the possibility of collective action as a solution to some of the market failures associated with investment in transferable human capital. This alternative view also predicts in what labour market settings such action is likely to occur, building on Olson’s work and theories of collective action by employers.

The collective action perspective differs crucially from human capital theory by predicting that transferability is endogenous i.e. significantly shaped by employers’ individual and collective action, and not simply by technology. Thus, ‘endogenous transferability’ is a principal link between the constitution of labour markets and employers’ choice of training and skill supply strategies.

The results confirm the prediction that transferability is‘endogenous’. Moreover, they suggest that employers’ collective action is more likely to succeed in ensuring transferability and encouraging employee investment than is using sanctions against employers to promote employer-financed transferable training.

Contents

Abstract
Contents
List of tables and figures
Tables
Figures
Acknowledgements
Abbreviations and translations

1. Introduction
1.1 The research question
1.2 Structure of the thesis
1.3 Two important topics
1.4 Employers’ collective action and training
1.5 Three issues in training research
1.6 Delimitation and definitions

2. Transferable training as a human capital investment
2.1 Introduction
2.2 The basic ideas and assumptions
2.3 Critique of human capital theory
2.4 General training and cost sharing
2.5 Definition of transferable training
2.6 Modifications of Becker’s theory
2.7 Human capital hypotheses

3. The collective action problem of transferable training
3.1 Introduction
3.2 Transferable training as a collective good
3.3 Impact of collective action
3.4 Probability of collective action by employers
3.5 Collective action theory and transferable training
3.6 A typology of employers’ provision of transferable training
3.7 Towards a test of H₀ and H_alt

4. Research design and case study background
4.1 Introduction
4.2 Research design and data collection
4.3 The background of the case study
4.4 The next chapters

5.Transferability of training
5.1 Introduction
5.2 Hypotheses and predictions
5.3 Processes: employers’ actions to influence transferability
5.4 Outcomes: transferability
5.5 Conclusion

6. Sharing training costs between employer and employee
6.1 Introduction
6.2 Hypotheses and predictions
6.3 Processes
6.4 Outcomes
6.5 A collective action explanation of incentives
6.6 Conclusion

7. Sufficient training or skill shortages?
7.1 Introduction
7.2 Hypotheses and predictions
7.3 Processes
7.4 Definition and measurement of sub-optimal training levels
7.5 Outcomes
7.6 Why employers’ collective action and flexible wages may solve different problems
7.7 Conclusion

8. Conclusion
8.1 Introduction
8.2 Summary results
8.3 Implications for the main topics
8.4 Synthesis or alternative?
8.5 Reconciling institutions and markets

Appendix 1. Case selection
Appendix 2. Data collection
Appendix 3. Estimation of cost sharing
Appendix 4. Estimation of training outcomes
Literature