Transferable Training as a Collective Good

The potential significance of employers' collective action for economic performance is widely acknowledged, but has not been complemented with corresponding theory‐guided research on the probability of collective action and the conditions for effective action. This article examines the nature of, the conditions for, and the consequences of employers' collective action on further training, a crucial component of a successful high‐skill strategy for industries and nations. The collective action perspective shares the core assumptions of human‐capital theory, but integrates the possibility of collective action as a solution to some of the market failures associated with investment in transferable human capital. This alternative view also predicts in what labour‐market settings such action is likely to occur, building on Olson's work and theories of employers' collective action. We suggest that employers' collective action is more likely to succeed in ensuring transferability and encouraging employee investment than is the use of sanctions against employers to promote employer‐financed transferable training.