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This article examines the link between labour market regulation, in particular in relation to employment security, and the development and maintenance of an adequate skill base. The implications of the different institutional and regulatory contexts within France and the UK are addressed through a comparative study of the civil aerospace sector. The evidence indicates that the institutional framework can have a profound effect on levels of employment security and, therefore, on training and skill development; and thus that labour market flexibility in the UK is a major barrier to the development and maintenance of skills.