Abstract

The standard economics view – followed by many international institutions that are deeply influential on national economic policies, including the Oecd, the Imf and the EU – suggests that steps to improve a country's competitiveness include a general emphasis on deregulation and decentralization of industrial relations and collective bargaining processes. In this paper we aim at contributing to this debate by studying how firm-level collective agreements affect workplace training decisions (a key issue for productivity) in a country – Italy – that, starting in the 1990s, has progressively shifted the collective bargaining process from the central/sectoral level, to the local/firm one, arriving in 2011 to introduce a law that allows firm-level decisions to derogate to national laws as well as to collective agreements even if this implies worsening individual working conditions and rights. Firm-level bargaining may affect workplace training in many ways. First, unions and workers' representatives may provide valuable information on skill gaps and mismatches and on adequate interventions (the so-called “collective voice face”). Second, they may promote long-term employment relationships and bolster the integrity of internal labor markets, creating incentives for long-run human capital investments. Third, they may contain wage pressures (the “monopoly face”), refrain from opportunistic behaviors (the “hold-up” problem) and other actions to limit workplace flexibility, ultimately freeing resources to “invest into the future”. While these and many other causal chains are usually in place, quantitative analysis is usually ill-equipped to provide an adequate account of them. The limitation is in data availability. At best, indeed, quantitatively treatable data sources are informative on whether a firm-based agreement is in place or not. While this may be enough to ascertain that a causal link between local bargaining processes and workplace training exists, it is powerless with respect to the identification of the actual mechanisms. This is where our paper mostly contributes to the literature. In the spirit of opening the “black box” of firm-level bargaining, we mix together quantitative and qualitative strategies. On the one hand, the application of state-of-the-art econometric techniques on RIL data, suggests that the existence of a firm-based collective agreement enhances the probability that a worker receives workplace training, increases the share of workers exposed to training programs, and makes the per-worker and per-trainee cost of training grow. On the other, thematic qualitative analysis of 21 semi-structured interviews to key informants of industrial relations, training programs and hiring strategies, allow us to identify four patterns or discourses on the relationship between collective bargaining and skill formation: skills understood as (continuing) within-firm vocational training; as results of an analysis on skill needs; as retraining in case of firm crisis; as misalignment between demand and supply of human capital for the incoming labor force. The joint reading of quantitative and qualitative results gives four concluding messages: (i) firm-level agreements have a positive effect on training; this happens due to (ii) the quality of management, and/or (iii) the existence of other reasons for workplace collective bargaining, inasmuch as human capital formation per se is not deemed sufficient for signing a firm-level agreement; (iv) the actual organization of training programs relies on the availability of third-party funds.