Barriers to entry, deregulation and workplace training: A theoretical model with evidence from Europe

Andrea Bassanini and Giorgio Brunello

European Economic Review, 2011, vol. 55, issue 8, 1152-1176

Abstract: We study the impact of regulatory barriers to entry on workplace training. We develop a model of training in imperfectly competitive product and labour markets. The model indicates that there are two contrasting effects of deregulation on training. As stressed in the literature, with a given number of firms, deregulation reduces the size of rents per unit of output that firms can reap by training their employees. Yet, the number of firms increases following deregulation, thereby raising output and profit gains from training and improving investment incentives. The latter effect prevails. In line with the predictions of the theoretical model, we find that the substantial deregulation in the 1990s of heavily regulated European industries (energy, transport and communication) increased training incidence.

Keywords: Training; Product market competition; Regulatory reform; Europe (search for similar items in EconPapers)
JEL-codes: J24 L11 O43 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (26)

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Working Paper: Barriers to Entry, Deregulation and Workplace Training: A Theoretical Model with Evidence from Europe (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:55:y:2011:i:8:p:1152-1176

DOI: 10.1016/j.euroecorev.2011.05.004

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