Everything must change for things to remain the same: How sticky ideas on skill formation shape state intervention

The influence of ideas on the political economy of work-related institutions remains under-explored, despite their undeniable impact. A key avenue through which ideas shape the workplace is through affecting institutional processes of reform, first and foremost through background conceptions of what governance arrangements are even possible, that condition reform processes. These ideas promote certain configurations in the political landscape of alternatives and exclude others, thereby shaping the interests of political actors. Consequently, I argue that by influencing reform trajectories within labor markets, ideas hold a significant role in the politics of the workplace. A crucial area for examining these dynamics is skill formation: positioned at the intersection of education and labor markets, skill formation is a fertile terrain for governance reforms and an ideal lens through which education and labor market politics come together. This paper explores the mechanism through which ideas impact reform trajectories in skill formation through a comparative study of state intervention in skill formation between 2014 and 2022 in France and Germany. The leading empirical puzzle relates to the reasons why recent state interventions in the training market have led to increased liberalization of training provision in France (culminated in the 2018 Loi Avenir Professionnel) and strengthened coordination between private interests in the German training market (symbolized by the 2019 Alliance for Initial and Further Education). Using a mixed-methods approach that combines process tracing and discourse network analysis of public media debates on skill formation, this study refutes explanations related to functionalism, state capacity, and the power of business and presents a novel ideational argument. Its key contention is that the background ideas of actors composing a country’s dominant growth coalition (Baccaro et al. 2022) influence the coalitional alignments that drive reform. In Germany, the entrenched nature of skill formation encourages actors to create growth coalitions promoting institutional reproduction and reinforcing cooperative governance. In contrast, in France, ideas about skill formation are more contested and the governance of skill formation is up for discussion, placing the growth coalition in the position to leverage the system to maximize its gains from it, including putting firms in charge of provision and diminishing the role of subnational actors in skill formation governance.