Organizational change, skill formation, human capital measurement: Evidence from Italian manufacturing firms

In this paper we provide a labour demand-oriented measure of human capital as defined by the amount of specific skills a firm generates through work-based training (WBT) activities. Relying on a job-competition framework of analysis, we merge three rich firm-level datasets and we estimate the impact of a set of variables that are supposed to affect both the propensity to invest in WBT and the intensity of training within the Italian manufacturing industry over the period 2001-2005. In this respect, special attention is devoted to technological and organizational innovation, international trade, the outsourcing of production activities, the use of private versus public funds for financing previous WBT and previous recruitment of new personnel. Our estimates show that, in general, innovation impacts more on WBT than international trade, in particular when new technologies are followed by organizational innovations. We also disaggregate our dependent variable by occupation and by typology of training provided and we find that techno-organizational innovation, as well as capital-embodied technological change, seem to affect more the propensity to train plant operators than managers. When looking at the type of WBT, we find that, apart from size and skill intensity, while outsourcing and the purchase of business services positively affect the propensity to provide in-house training, techno-organizational change seems to drive the choice to train outside the firm. A coaching-like training activity, instead, seems to be the first type of skill development strategy provided by firms as it is mainly affected by previous recruitment. Finally we estimate training intensity in terms, respectively, of the number of training activities provided, private and total training costs and the share of trainees. Our results point to a positive and significant effect of skill intensity and innovation intensity, while no significant effect is found for the degree of commitment to internationalization