Gérard Ballot

Who Benefits from Training and R&D, the Firm or the Workers?

The present paper offers a novel study of the effects of intangible assets on wages and productivity. Training, R&D and physical capital are all taken into account, and their joint effects are examined. We use panels of firms in order to control for unobserved fixed effects and the potential endogeneity of training and R&D, using data for France and Sweden. The estimation of productivity and wage equations allows us to show how the benefits of investment in physical capital, training and R&D are shared between the firm and the workers. We found that firms indeed obtain the largest part of the returns to their investments, but their share is relatively lower for intangible assets (R&D and training) than for physical capital.

Firms' human capital, R&D and performance: a study on French and Swedish firms

Abstract This paper studies the effects of human and technological capital on productivity in a sample of large French and Swedish firms. While the role of technological capital as measured by R&D has been intensively investigated, almost no work has been done on the role of human capital as measured by firm-sponsored training and even less its interaction with technological capital. The level of intangible capital may also have a lasting effect on productivity growth, as emphasised by some endogenous growth models in a macroeconomic setting. The study uses data from two panels of large French and Swedish firms for the same period (1987–1993). It constructs measures of a firms human capital stock, based on their past and present training expenditures. The results confirm that firm-sponsored training and R&D are significant inputs in the two countries, although to a different extent, and have high returns. However, except for managers and engineers in France, we do not find evidence of positive interactions between these two types of capital. Finally, growth effects at the firm level do not appear.

Modeling the labor market as an evolving institution: model ARTEMIS

Abstract A stylized French labor market is modeled as an endogenously evolving institution. Boundedly rational firms and individuals strive to decrease costs or increase utility. The labor market is coordinated by a search process and decentralized setting of hiring standards, but intermediaries can speed up matching. The model reproduces the dynamics of the gross flows and the spectacular changes in mobility patterns of some demographic groups when the oil crisis in the 1970s occurred, notably the sudden decline of the integration in good jobs. The internal labor markets (ILM) of large firms are shown to increase unemployment if the secondary (temporary or bad) jobs do not exist.

Training policies and economic growth in an evolutionary world

Abstract The role of training and human capital accumulation as a source of innovation and growth is studied within an evolutionary microsimulation model. Firms within the model learn about technology through radical/incremental innovation and imitation. General human capital increases the probability of innovation whereas specific human capital increases technical efficiency. Firms endogenously determine the level of investment in fixed and current assets, R&D activities, and education and training. Human capital accumulation through investment in education and training is shown to be a source of economic growth even though firms tend to under-invest in these activities because they cannot fully recoup training costs when workers quit. The paper investigates the effects of various training policies on macro-performance. The first policy is to subsidise all education and training activities. The second policy requires firms to spend a certain percentage of the wage bill on training activities. In the third case, the government subsidises training activities if the firm hires unemployed people, and pays the social security contributions for 1 year. We experiment with these policies because many European countries adopt similar policies to cure the unemployment problem and to enhance economic growth. By running 101 experiments for each policy, increasing the parameter value step by step, we are able to test the impact of training policies on macro-economic performance (manufacturing growth rates, unemployment, etc.), and to estimate policy elasticities through econometric techniques. The results suggest that some subsidy policies are effective in improving the long-run macro-performance while a minimum requirement to train set upon firms is not.

Competition, training, heterogeneity persistence, and aggregate growth in a multi-agent evolutionary model

We use the framework of a multi-agent based macroeconomic model to analyse the possibility in the long run of the coexistence of two alternative types of firm behaviour towards the accumulation of human capital, training and poaching, and its aggregate outcomes. Besides R&D, we assume that firms need workers endowed with general human capital (or competencies) in order to innovate but also, although to much lower extent, in order to imitate innovations. Firms can either train workers or poach trained workers. Firms are assigned a type, and experiments compare the outcomes of the change of key parameters. The main results are: i) the coexistence of trainers and poachers is possible in the long run, and can even be beneficial to the economy when poachers raid inefficient trainers, ii) trainers fare somewhat better than poachers do, iii) mobility costs have a major negative impact on aggregate performance.