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Barriers to Entry, Deregulation and Workplace Training

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  • Andrea Bassanini

    (OECD)

  • Giorgio Brunello

    (University of Padova)

Abstract

We study the impact of regulatory barriers to entry on workplace training. We develop a model of training in imperfectly competitive product and labour markets. The model indicates that there are two contrasting effects of deregulation on training. As stressed in the literature, with a given number of firms, deregulation reduces the size of rents per unit of output that firms can reap by training their employees. Yet, the number of firms increases following deregulation, thereby raising output and profit gains from training and improving investment incentives. The latter effect prevails. In line with the predictions of the theoretical model, we find that the substantial deregulation in the 1990s of heavily regulated European industries (energy, transport and communication) increased training incidence.

Suggested Citation

  • Andrea Bassanini & Giorgio Brunello, 2011. "Barriers to Entry, Deregulation and Workplace Training," "Marco Fanno" Working Papers 0137, Dipartimento di Scienze Economiche "Marco Fanno".
  • Handle: RePEc:pad:wpaper:0137
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    Cited by:

    1. Bellmann Lutz & Gerner Hans-Dieter & Leber Ute, 2014. "Firm-Provided Training During the Great Recession," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(1), pages 5-22, February.
    2. Brunello, Giorgio, 2009. "The Effect of Economic Downturns on Apprenticeships and Initial Workplace Training: A Review of the Evidence," IZA Discussion Papers 4326, Institute of Labor Economics (IZA).
    3. Konstantinos Angelopoulos & Andrea Benecchi & James Malley, 2017. "Can subsidising job-related training reduce inequality?," Working Papers 2017_10, Business School - Economics, University of Glasgow.
    4. Christos Bilanakos & Colin P. Green & John S. Heywood & Nikolaos Theodoropoulos, 2017. "Do Dominant Firms Provide More Training?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(1), pages 67-95, February.
    5. Mühlemann, Samuel & Wolter, Stefan C. & Wüest, Adrian, 2009. "Apprenticeship Training and the Business Cycle," IZA Discussion Papers 4460, Institute of Labor Economics (IZA).
    6. Christos Bilanakos & John S. Heywood & John Sessions & Nikolaos Theodoropoulos, 2014. "Worker Training and Competing on Product Quality," University of Cyprus Working Papers in Economics 08-2014, University of Cyprus Department of Economics.
    7. Bassanini, Andrea & Brunello, Giorgio, 2011. "Barriers to entry, deregulation and workplace training: A theoretical model with evidence from Europe," European Economic Review, Elsevier, vol. 55(8), pages 1152-1176.
    8. Gunther Tichy, 2014. "Flexicurity – ein an seiner Umsetzung scheiterndes Konzept," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(8), pages 537-553, August.
    9. John S Heywood & Uwe Jirjahn & Annika Pfister, 2020. "Product market competition and employer provided training in Germany [Technical change, inequality and the labor market]," Industrial and Corporate Change, Oxford University Press, vol. 29(2), pages 533-556.
    10. Bilanakosa, Christos & Heywood, John S. & Sessions, John & Theodoropoulos, Nikolaos, 2017. "Worker Training and Quality Competition," GLO Discussion Paper Series 137, Global Labor Organization (GLO).
    11. By Barbara Mueller & Jürg Schweri, 2015. "How specific is apprenticeship training? Evidence from inter-firm and occupational mobility after graduation," Oxford Economic Papers, Oxford University Press, vol. 67(4), pages 1057-1077.
    12. Bassanini, Andrea, 2015. "A Bitter Medicine? Short-term Employment Impact of Deregulation in Network Industries," IZA Discussion Papers 9187, Institute of Labor Economics (IZA).
    13. Francesca Sgobbi, 2016. "Train the worst or train the best? The determinants of employer-sponsored training in five European countries," Working Papers 29, Birkbeck Centre for Innovation Management Research, revised Jan 2016.
    14. Fitzenberger, Bernd & Muehler, Grit, 2011. "Dips and floors in workplace training: Using personnel records to estimate gender differences," ZEW Discussion Papers 11-023, ZEW - Leibniz Centre for European Economic Research.
    15. Konstantinos Angelopoulos & Andrea Benecchi & Jim Malley, 2017. "Can Subsidising Job-Related Training Reduce Inequality?," CESifo Working Paper Series 6605, CESifo.
    16. Bilanakos, Christos & Heywood, John S. & Sessions, John & Theodoropoulos, Nikolaos, 2018. "Does demand for product quality increase worker training?," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 159-177.
    17. Roshchin, S. & Travkin, P., 2015. "Job-Related Training on Russian Enterprises," Journal of the New Economic Association, New Economic Association, vol. 26(2), pages 150-171.

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    More about this item

    Keywords

    training; product market competition; regulatory reform; Europe.;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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