Do labour hoarding practices stimulate training investments? Evidence from the Italian Great Recession
International Journal of Manpower
ISSN: 0143-7720
Article publication date: 14 March 2022
Issue publication date: 22 August 2022
Abstract
Purpose
This paper investigates the relationship between labour hoarding practices and training investments during severe economic downturns focusing on the case of Italy during the Great Recession.
Design/methodology/approach
Data come from the 2010 Italian wave of Continuing Vocational Training Survey (CVTS). Econometric estimates plug a proxy of labour hoarding into the probability function that firms provide either off-the-job or on-the-job training. A bivariate selectivity probit model is also used for robustness sake.
Findings
Results show that labour hoarding should not be considered as an enhancer of training investments when considered as a standing-alone practice in presence of severe and deep economic downturn. However, labour hoarding does not penalize off-the-job training investments if it occurs in an innovative firm or in a firm that perceive specific skill requirements in the workforce during the recessionary period.
Originality/value
The paper contributes to the debate on the role of labour hoarding during severe recessions by showing that it cannot be functional to re-oriented firms’ investments aimed at upskilling their workforce. It is only compatible with new training courses that accompany the workforce across a technological transition. Policy implications deals with the suitability of job retention schemes or state-financed furlough during recessions, as occurred during the coronavirus disease 2019 (COVID-19) pandemic.
Keywords
Acknowledgements
Data used in this study were made available by the Italian Institute of Statistics. The author thanks the Bologna Office of the Institute for the assistance in accessing the dataset. The author is grateful to Giovanni Guidetti for the support and the very useful suggestions, and the associate editor and two anonymous referees for the very constructive comments and insights.
Citation
Pedrini, G. (2022), "Do labour hoarding practices stimulate training investments? Evidence from the Italian Great Recession", International Journal of Manpower, Vol. 43 No. 6, pp. 1449-1468. https://doi.org/10.1108/IJM-08-2021-0507
Publisher
:Emerald Publishing Limited
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