Underinvestment in on-the Job Training?

[Excerpt] A growing number of commentators are pointing to employer sponsored training (OJT)as a critical ingredient in a nation\u27s competitiveness. American employers appear to devote less time and resources to the training of entry level blue collar, clerical and service employees than employers in Germany and Japan (Limprecht and Hayes 1982, Mincer and Higuchi 1988, Koike 1984, Noll et al 1984, Wiederhold-Fritz 1985). In the United States, only 33 percent of workers with 1 to 5 years of tenure report having received skill improvement training from their current employer (Hollenbeck and Wilkie 1985). Analyzing 1982 NLS-Youth data, Parsons (1985) reports that only 34 to 40 percent of the young workers in clerical, operative, service and laborer jobs reported that it was very true that the skills [I am] learning would be valuable in getting a better job. The payoffs to getting jobs which offer training appear to be very high, however. In Parson\u27s study, having a high learning job rather than a no learning job in 1979 increased a male youth\u27s 1982 wage rate by 13.7 percent. While the 1980 job had no such effect, the 1981 job raised wages by 7.2 percent when it was a high learning job rather than a no learning job

Underinvestment in Employer Training: Is a Mandate to Spend on Training the Answer?

American employers and their workers under invest in employer training. Under investment occurs because training generates externalities, because the tax system is biased against training investments, and because most workers are unable to finance general training because they lack access to loans to finance consumption during periods of heavy investment in training. School based occupational training ameliorates the under investment problem somewhat but it is not a complete answer to the problem. The French approach of requiring firms to spend at least 1.4 percent of their wage bill on continuing training of employees (if they are to avoid paying a tax) holds a good deal of promise but suffers from some critical flaws. These flaws are not basic to the tax offset design, however, so the paper concludes with a description of how a mandate to spend for the United States should be designed

Estimating Public and Private Expenditures on Occupational Training in the United States

[Excerpt] Retraining and upgrading the skills of incumbent workers and providing training to new labor force entrants, dislocated workers, and unemployed persons can help increase the efficiency and effectiveness of the workforce. Funding for occupational training comes from many sources — the federal government, state and local governments, private employers, philanthropic foundations, and individual workers themselves. This report examines occupational training to present a preliminary picture of the total spending on job training in the United States

Employer Training and Skill Shortages: A Review of the State of Knowledge With Recommendations for Future Research by the Department of Labor

This report proposes that the Department of Labor undertake a program of research designed to inform the policy debate related to skill shortages and the role of employer training in ameliorating them. The paper reviews the currently available evidence and then proposes new research on seven questions

Employee Training: An International Perspective

Canada’s training effort relative to the rest of the IALS countries, measured in terms of hours of training per employee, was found to be average. The average employee in Canada received 44 hours of training in 1994, similar to the hours of training per employee in Switzerland, the United States and Germany. However, Canada’s training effort was considerably less than the Netherlands (74 hours per employee). One finding of particular interest to Canada is the virtual equality of training effort, measured in hours of training per employee, between Canada and the United States. This comparison is important for Canada because of its extensive trade links to the United States. Also, comparisons between Canada and the United States are more accurate than comparisons to other countries because of the similarity in training institutions between the two countries. By contrast, comparisons of Canada to other countries should be treated as broad indicators, rather than precise measures. Canada’s balance between employer- and employee-supported training was also average. Compared to the United States, for example, Canadian employees usually receive somewhat more training on their own, whereas United States employees tended to receive somewhat more training through their employer. Particularly interesting is the fact that Canada had the highest rate of employees reporting that they wanted to take more career or job-related training. Although interpretations of this statistic differ, we can reasonably conclude that Canadian employees are relatively more supportive of further training than those in the other countries.adult training

Direct Federal Support of Individuals Pursuing Training and Education in Non-degree Programs

[Excerpt] This report provides an overview of existing federal programs and benefits that support individuals engaged in the pursuit of training and education in non-degree instructional and work-based learning programs. It informs consideration of additional or revised policy approaches aiming to support pursuit of training and education through non-degree programs. The report begins with a brief description of employer demand for individuals who have completed non-degree programs. This is followed by a discussion of the landscape and key characteristics of non-degree programs, from those offered through work-based learning to those offered through more formal instructional means. The report concludes with a detailed description of six federal programs and three tax benefits that currently provide direct financial support to students pursuing training and postsecondary education in non-degree instructional and work-based learning programs. Each program and benefit description highlights potential gaps and limitations in the scope and extent to which the program or benefit supports individuals pursuing non-degree programs, as well as student eligibility requirements and federal administration and oversight

Crucial contributors? Re-examining labour market impact and workplace-training intensity in Canadian trades apprenticeship

Canadian apprenticeship policy has recently turned to direct subsidies for participants, including a federal tax incentive for employers. Some assumptions underlying the employer subsidy are: that apprenticeship training is a principal contributor to the skilled trades labour supply; that employers of apprentices typically incur high training cost and risks; and that in the absence of offsetting incentives, these would deter their participation. These assumptions are tested, using an analysis of 2006 census data and a series of 33 employer interviews. The census data reveal that, in 74 “skilled trades†occupations (NOC-S group H), the proportion of the labour force reporting an apprenticeship credential is 37%. When certificates granted to “trade qualifiers†are excluded from the total, registered apprenticeship certification is found to contribute roughly 25% of the skilled trades labour supply. A closer examination of the census data reveals strong inter-occupational differences in the certification rate and in the ratio of certified to less-than-certified workers, suggesting a de facto hierarchy of trades occupations. The interviews reveal sharp variations in employers’ workplace training efforts, challenging the twin suppositions that employers of apprentices are uniformly high contributors to skill formation, and that high training-related costs risks generally deter their participation. Differences in training behaviour are attributed to high-skill versus low-skill business strategies that in turn reflect differing product markets and regulatory constraints. Whatever the level of their training effort, all of the participating employers are able to minimize the training-related risks that have been cited as the principal rationale for employer subsidies. The paper argues for a more nuanced approach to skills policy and research in Canada, with greater attention to the diversity of actors’ strategic interactions with the training system.Apprenticeship, Skill, Trades, Training, Labour Supply, Canada