Small States and Skill Specificity

The varieties of capitalism literature has put skill systems at the center of comparative politics. Yet its claims about skill specificity are driven by two large coordinated economies, Germany and Japan. This article examines political change of skills in two small coordinated economies. Switzerland has expanded its general skills orientation, whereas Austria retains a highly specific skills system. The cause of this divergence is the different interests of small and large employers: Small employers are more cost sensitive than are large employers, which leads them to oppose the introduction of more general education. The study also shows that the primary measure of skill specificity used in quantitative work—vocational training share—is unreliable. It fails to distinguish between secondary and tertiary vocational training, which have opposite effects on skill specificity. The article develops and justifies an alternative measure—tertiary vocational training—that better predicts the skills clusters observed in advanced capitalism.