Skill-Biased Technological and Organizational Changes: Empirical Evidence for Two Italian Local Production Systems.

The analysis of the workforce composition dynamic has been a hot issue in the economic field for many years. The shifting of labour demand towards relatively more skilled workers has been interpreted in several ways. A consolidated explanation is that technological change has driven the labour demand with detrimental consequences for less skilled workers (skill-biased technological change). More recently the role of organizational change has been investigated as well (skill-biased organisational change). The main objective of the present work is to verify the interactions between technological change, organizational change and the workforce composition within an integrated framework that also leads us to consider the role of specific aspects of the industrial relations system. The empirical analysis is based on original datasets which include data on manufacturing firms for two Italian local production systems, located in the Emilia-Romagna region: Modena and Reggio Emilia. The results show the existence of a relation between specific aspects of technological and organizational changes and the workforce composition in terms of white collars and blue collars workers. In particular, the upskilling effect is mainly associated with technological change, while organisational change is more linked to a detrimental effect on less skilled workers. The existence of complementarities seems to be supported by the results associated with interaction terms between technological and organisational variables. Finally, the industrial relations variables provide mixed results indicating non univocal results between good quality industrial relations and workforce composition