Innovation and skill upgrading: The role of external vs internal labour markets
AbstractFollowing technical and organisational changes, firms may react to increasing skill requirements either by training or hiring the new skills, or a combination of the two. Using matched datasets with about 1,000 French plants, we assess the relative importance of these external and internal labour market strategies. We show that skill upgrading following technological and organisational changes takes place mostly through internal labour markets adjustments. Consistently with the results in the literature, we find that new technologies and organisational changes are associated with an upward shift in the occupational structure within firms. We show that about one third of the upgrading of the occupational structure is due to hiring and firing workers on the external labour market, whereas two-thirds are due to promotions. Moreover, we find no compelling evidence of external labour market strategies based on "excess turnover". In contrast, French firms heavily rely on training in order to upgrade the skill level of their workforce. When splitting the sample across sectors, this pattern of results appears to be particularly strong for manufacturing firms whereas, in services, external labour market strategies tend to be more widespread. We then consider the determinants of the strategies chosen by firms. We argue that the relative cost of internal versus external labour market flexibility is likely to be critical and that it can be partly captured by firm size and by the density on the local labour market. We find that external labor market strategies tend to be more important when firms are located on high-density labor markets.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HAL in its series PSE Working Papers with number halshs-00588316.
Date of creation: Mar 2008
Date of revision:
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00588316
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/
technical and organisational change ; turnover ; skill bias ; training ; internal labour markets;
Other versions of this item:
- Luc Behagel & Eve Caroli & Emmanuelle Walkowiak, 2007. "Innovation and Skill Upgrading : The Role of External vs Internal Labour Markets," Working Papers 2007-02, Centre de Recherche en Economie et Statistique.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eve Caroli & John Van Reenen, 2001.
"Skill-Biased Organizational Change? Evidence From A Panel Of British And French Establishments,"
The Quarterly Journal of Economics,
MIT Press, vol. 116(4), pages 1449-1492, November.
- Caroli, Eve & Van Reenen, John, 1999. "Skill biased organizational change? Evidence from a panel of British and French establishments," CEPREMAP Working Papers (Couverture Orange) 9917, CEPREMAP.
- Sandra E Black & Lisa M Lynch, 2002.
"What's Driving the New Economy? The Benefits of Workplace Innovation,"
02-03, Center for Economic Studies, U.S. Census Bureau.
- Sandra E. Black & Lisa M. Lynch, 2004. "What's driving the new economy?: the benefits of workplace innovation," Economic Journal, Royal Economic Society, vol. 114(493), pages F97-F116, 02.
- Sandra E. Black & Lisa M. Lynch, 2001. "What's driving the new economy? The benefits of workplace innovation," Staff Reports 118, Federal Reserve Bank of New York.
- Sandra E. Black & Lisa M. Lynch, 2000. "What's Driving the New Economy: The Benefits of Workplace Innovation," NBER Working Papers 7479, National Bureau of Economic Research, Inc.
- Philippe, ASKENAZY & Eva, MORENO-GALBIS, 2004.
"The impact of technological and organizatioanl changes on labor flows. Evidence on French establishments,"
Discussion Papers (IRES - Institut de Recherches Economiques et Sociales)
2004031, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Philippe Askenazy & Eva Moreno Galbis, 2007. "The Impact of Technological and Organizational Changes on Labor Flows. Evidence on French Establishments," LABOUR, CEIS, vol. 21(2), pages 265-301, 06.
- Philippe Azkenazy & Eva Moreno, 2004. "The impact of technological and organizational changes on labor flows. Evidence on French establishments," DELTA Working Papers 2004-25, DELTA (Ecole normale supérieure).
- Philippe Zamora, 2006. "Changements organisationnels, technologiques et recours à la formation dans les entreprises industrielles," Revue économique, Presses de Sciences-Po, vol. 57(6), pages 1235-1257.
- repec:pri:indrel:1041 is not listed on IDEAS
- Luc Behaghel & Nathalie Greenan, 2005. "Training and Age-Biased Technical Change : Evidence from French Micro Data," Working Papers 2005-06, Centre de Recherche en Economie et Statistique.
- Emmanuelle Walkowiak, 2006. "Renouvellement de la main-d'œuvre et modernisation des entreprises," Revue économique, Presses de Sciences-Po, vol. 57(6), pages 1205-1233.
- Abowd, John M & Corbel, Patrick & Kramarz, Francis, 1997.
"The Entry and Exit of Workers and the Growth of Employment: An Analysis of French Establishments,"
CEPR Discussion Papers
1765, C.E.P.R. Discussion Papers.
- John M. Abowd & Patrick Corbel & Francis Kramarz, 1999. "The Entry And Exit Of Workers And The Growth Of Employment: An Analysis Of French Establishments," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 170-187, May.
- John M. Abowd & Patrick Corbel & Francis Kramarz, 1996. "The Entry and Exit of Workers and the Growth of Employment: An Analysis of French Establishments," NBER Working Papers 5551, National Bureau of Economic Research, Inc.
- Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
- Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute for the Study of Labor (IZA).
- Davide Antonioli & Paolo Pini & Rocco Manzalini, 2011.
"Innovation, Workers Skills and Industrial Relations: Empirical Evidence from Firm-level Italian Data,"
201106, University of Ferrara, Department of Economics.
- Antonioli, Davide & Manzalini, Rocco & Pini, Paolo, 2011. "Innovation, workers skills and industrial relations: Empirical evidence from firm-level Italian data," The Journal of Socio-Economics, Elsevier, vol. 40(3), pages 312-326, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).
If references are entirely missing, you can add them using this form.