Concept
Estevez-Abe, Iversen and Soskice (2001) distinguished general from firm- and industry-specific skills. Because specific skills lose value with job loss, unemployment insurance and employment protection encourage workers to invest in them; social protection thus supports skill formation. It is a pillar of varieties of capitalism.
Asset theory and evidence
Iversen and Soskice (2001) treated skills as assets and showed people with specific skills support social insurance more, linking human capital theory to welfare preferences. Cusack, Iversen and Rehm (2006) and Rehm (2009) found occupational unemployment risk raises redistribution support. Iversen (2005) used this to explain welfare differences between coordinated and liberal market economies.
Critiques and extensions
Power resources scholars argue it underplays class conflict, and others note dualization, where protected insiders gain while outsiders are excluded. Busemeyer (2015) linked skill regimes to inequality and social investment.
FAQ
- What is skill specificity theory in simple terms?
- People with skills useful only in one firm or industry fear job loss more and so want more social insurance.
- What does it explain?
- Why countries like Germany, rich in specific skills, have stronger employment protection and social insurance.
Sources reviewed: 2026-10-26
References
- Hall, P. A., & Soskice, D. (Eds.). (2001). Varieties of capitalism: The institutional foundations of comparative advantage. Oxford University Press. The varieties of capitalism framework.
- Estevez-Abe, M., Iversen, T., & Soskice, D. (2001). Social protection and the formation of skills: A reinterpretation of the welfare state. In P. A. Hall & D. Soskice (Eds.), Varieties of capitalism (pp. 145–183). Oxford University Press. Social protection supports specific skill investment.
- Iversen, T., & Soskice, D. (2001). An asset theory of social policy preferences. American Political Science Review, 95(4), 875–893. Specific skills raise demand for social insurance.
- Iversen, T. (2005). Capitalism, democracy, and welfare. Cambridge University Press. Explains welfare variation via skill regimes.
- Cusack, T., Iversen, T., & Rehm, P. (2006). Risks at work: The demand and supply sides of government redistribution. Oxford Review of Economic Policy, 22(3), 365–389. Occupational risks shape redistribution demand.
- Rehm, P. (2009). Risks and redistribution: An individual-level analysis. Comparative Political Studies, 42(7), 855–881. Individual-level risk and redistribution.
- Busemeyer, M. R. (2015). Social investment, skills and inequality. In C. Chwalisz & P. Diamond (Eds.), The predistribution agenda (pp. 161–176). I.B. Tauris. Skills, inequality and social investment.