Training in the Great Recession – Evidence from an Individual Perspective

Abstract

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Do labour hoarding practices stimulate training investments? Evidence from the Italian Great Recession

“…The finding of an anti-cyclical attitude of on-the-job training, in presence of labour hoarding, is strengthened in case of a clear identification of skills improvement needs. Similar results were observed in Germany (Dietz and Zwick, 2020b;Bellmann et al, 2014), where the crisis had a negative impact on training participation and on the number of training measures received by each employee, with a relative penalization for unskilled workers. Interestingly, the negative effect was stronger for the year 2010, during which firms that declared to be in crisis sharply reduced their training interventions (Dietz and Zwick, 2020b).…”

“…In this way I can test not only whether LabHoard is associated with a reduction of training volumes but also whether this effect is different according to firm's propensity to innovative. The lag in time between LabHoard (referred to 2009) and the dependent variables (referred to 2010) is justified by the achievement of the previous literature (Dietz and Zwick, 2020b) and mitigates the potential endogeneity affecting the relationship. There is still a potential endogeneity between Innov and the dependent variables, but it is usually assumed that innovative activities are the outcome of previous training investments ( Bartel and Lichtenberg, 1987;Dearden et al, 2006), whereas they can be the driver of contemporary and future training interventions by generating a growth in skills demand (Acemoglu, 1997;Green, 2013).…”

“…, 2014), where the crisis had a negative impact on training participation and on the number of training measures received by each employee, with a relative penalization for unskilled workers. Interestingly, the negative effect was stronger for the year 2010, during which firms that declared to be in crisis sharply reduced their training interventions (Dietz and Zwick, 2020b). This evidence suggests that the decline of firm-provided training was also slightly delayed in time with respect to the outbreak of the crisis.…”

Firm investments in skills and capital in the UK services sector

“…In particular, Costa et al (2019) provide causal evidence that wages and training fell in sectors where intermediate import prices rose by more as a result of the sterling depreciation induced by the Referendum result. There is also existing evidence from Germany that individual training decreased as a result of the Financial Crisis (Dietz and Zwick, 2018).…”