Transferable training and the collective action problem for employers
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.