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Training by firms in italian regional labour markets: the effects of education and unemployment

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  • Giuseppe Croce
  • Emanuela Ghignoni

Abstract

This paper analyses the determining reasons of the differences among the Italian regions in matter of investment in workers’ training. Training incidence in Italy is not homogeneous among regions, with a lower intensity in the South. Two not alternative explanations are proposed at a theoretical level and tested by econometric estimates, referring to the complementarity between education and training and to the effects of regional unemployment. Both hypotheses, as the results show, are upheld by empirical estimates, based on the European Community Households Panel. In our results educational level appear to be important as it affects the choice made by the firm of which workers to offer an opportunity of training, whereas unemployment rate and wage compression affect the decision of how many workers to train. The unemployment effect found out by this paper confirms that, as it has been pointed out by most recent developments of human capital literature, the firms incentives to pay for general training depend on the level of wage compression. Notwithstanding it represents an original result as compression in this model doesn’t depend on institutional factors, as usually assumed in the literature, but on the dependence of unskilled wage on regional unemployment.

Suggested Citation

  • Giuseppe Croce & Emanuela Ghignoni, 2002. "Training by firms in italian regional labour markets: the effects of education and unemployment," Working Papers 66, University of Rome La Sapienza, Department of Public Economics.
  • Handle: RePEc:sap:wpaper:wp66
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    References listed on IDEAS

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    Cited by:

    1. Emanuela Ghignoni, 2006. "Human capital, unemployment, and probability of transition to permanent employment in the Italian regional labour markets," Working Papers 93, University of Rome La Sapienza, Department of Public Economics.
    2. Giorgio Brunello & Maria De Paola, 2004. "Market Failures and the Under-Provision of Training," CESifo Working Paper Series 1286, CESifo Group Munich.

    More about this item

    Keywords

    education; training; wage compression; unemployment.;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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