Protection of Mutual Interests? Employment Protection and Skill Formation in Different Labour Market Regimes

Abstract

■ The `varieties of capitalism' school argues that firm-specific skills are more common in coordinated than in liberal economies and that appropriate training is facilitated by employment protection legislation. We compare the level of firm-specific skills across 21 countries with different capacities for labour market coordination. The data provide very limited support for the thesis, showing large variation among the coordinated countries. The results indicate `varieties of coordination', which have different implications for the incidence and consequences of firm-specific skill. Improved operationalization of the skill concept seems urgent.