Skill-Biased Organizational Change? Evidence from A Panel of British and French Establishments

Abstract

This paper investigates the determination and consequences of organizational changes (OC) in a panel of British and French establishments. Organizational changes include the decentralization of authority, delayering of managerial functions, and increased multitasking. We argue that OC and skills are complements. We offer support for the hypothesis of "skill-biased" organizational change with three empirical findings. First, organizational changes reduce the demand for unskilled workers in both countries. Second, OC is negatively associated with increases in regional skill price differentials (a measure of the relative supply of skill). Third, OC leads to greater productivity increases in establishments with larger initial skill endowments. Technical change is also complementary with human capital, but the effects of OC is not simply due to its correlation with technological change but has an independent role.

ICT uses, innovation and SMEs productivity: Modeling direct and indirect effects in small local firms

“…In a sample of British firms (Nickell and Van Reenen, 2000), and of British and French firms (Caroli and Van Reenen, 2001), the link between workplace innovation and firm productivity was found to be more apparent when labour relations systems developed joint practices for firms and workers to be involved in decision-making and problem-solving. Another set of studies conducted on British firms (Bloom et al, 2005;Clayton, Sadun and Farooqui, 2007) found that ICT investment and use have a significant impact on firm productivity, albeit to varying degrees.…”

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“…Skilled workers are more able to better able to communicate information, they have a relative a d v antage in multi-tasking, and the costs of training them is lower compared to unskilled workers. Hence, the returns to innovative work practices could beexpected to be higher when the skill level of the workforce in an establishment is higher (Caroli and van Reenen, 2001). Similar to the case of a skill-biased technological change, one would expect a relative increase in the employment of skilled workers and professionals and engineers.…”

“…First, Z et and I et are likely to be endogenous (Caroli andvan Reenen, 2001 Athey andStern, 1998). A positive demand shock, for example, might enable rms to increase the number of skilled workers, to invest in new technologies, and to experiment with innovative w orkplace systems.…”

“…2 Even though the dissemination of HPWOs varies between countries, industries, and rms, the observed reorganization process appears to be of quantitative importance in almost all industrialized economies. 3 Recent empirical studies by Bresnahan, Brynjolfsson and Hitt (1999) for the US, and Caroli and van Reenen (2001) for France and the UK suggest that HPWOs are complementary with skills and hence could add to the explanation of the relative increase in the demand for skilled labor.…”

ICT, Innovation and Productivity: Evidence from Eastern European Manufacturing Firms

“…Additionally, effects are consistent across urban versus rural locations and across high versus low knowledge intensive sectors. Analysis of panel data from for British and French firms (Caroli and Van Reenen, 2001) revealed that skilled workers adapt more easily to changes in organization. Having the above in mind, the authors presented empirical evidence of relationship between workplace innovation and human capital, and its influence on productivity.…”