Techno-organizational change and skill formation: evidence from Italian manufacturing firms

This paper emphasizes the role of labour demand as a determinant of working skill formation. In particular, we study the relationship between techno-organizational innovation and skill formation from a labour demand perspective. In this respect, we investigate if activities aimed at increasing the international commitment and the technological and organizational change do have an effect on both the propensity of firms to train and on the intensity of training. On this purpose, by relying on a job-competition-like framework about the operation of the labour market in allocating skills, we first estimate which factors do affect the propensity of firms to invest in work-based training activities, and, secondly, we estimate if the same factors do also play a role in determining the degree of intensity of such a training activity. Relying on a new dataset on Italian manufacturing firms active over the period 2001-2006, we first estimate a probit model on the probability for a firm to train; then we employ a Heckman two-stage selection model on the share of trainees with which we can control for selectivity bias. Our results point to a positive and significant effect of both firms’ characteristics, like size, specialization and capital intensity, and firms’ techno-organisational activities on both training incidence and on training intensity. A particularly significant role, in this respect, is played by the combination of process innovation and the adoption of new organizational practices.