The Right Skills for the Job?: Rethinking Training Policies for Workers

by Rita Almeida, Jere Behrman, David Robalino

Overview

Creating jobs and increasing productivity are at the top of agenda for policymakers across the world. Knowledge accumulation and skills are recognized as central in this process. More-educated workers not only have better employment opportunities, earn more, and have more stable and rewarding jobs, but also they are more adaptable and mobile. Workers who acquire more skills also make other workers and capital more productive and, within the firm, they facilitate the adaptation, adoption, and ultimately invention of new technologies. This is crucial to enable economic diversification, productivity growth, and ultimately raise the standards of living of the population. _x000D_ _x000D_ This report brings new ideas on how to build and upgrade job relevant skills, focusing on three types of training programs relevant for individuals who are leaving the formal general schooling system or are already in the labor market: pre-employment technical and vocational education and training (TVET); on-the-job training (OJT); and training-related active labor market programs (ALMPs). Several previous studies have discussed some of the flaws in current systems and outlined options for reform. As a consequence, there has been a shift away from the investment in pre-vocational training courses to programs to improve access to and the quality of general secondary education. There have also been calls to encourage a stronger involvement of the private sector in the provision of training, together with increased emphasis in the quality and relevance of the content. One result has been a push to rethink the governance and financing arrangements of training institutions. But overall policies at these three levels of the training systems remain disconnected and there has not been an integrated framework linking them to the market and government failures that need to be addressed. _x000D_ _x000D_ This book makes two important contributions. First, it takes an in-depth look at the types of market and government failures that can result in underinvestment in training or the supply of skills that are not immediately relevant to the labor market. Second, building on the analysis of the limitations of both markets and governments and the results of case studies and recent impact evaluations, the report develops new ideas to improve the design and performance of current training systems.

Product Details

ISBN-13:	9780821387153
Publisher:	World Bank Publications
Publication date:	07/13/2012
Sold by:	Barnes & Noble
Format:	eBook
File size:	3 MB

Table of Contents

Foreword xi

Acknowledgments xiii

Abbreviations xv

Introduction 1

Market Failures, OJT, and Training-Related ALMPs 3

Government Failures and TVET 4

An Agenda for Research and Policy Analysis 6

Notes 6

References 8

Chapter 1 Overview David Robalino Rita Almeida 11

Introduction 11

Linking Market and Government Failures to the Design of Training-Related Interventions 15

Implications for Training Programs 19

Open Methodological and Policy Questions: Building a Research and Operational Agenda 34

Notes 39

References 44

Chapter 2 Policy Framework: The Economic Rationale for Skills Development Policies David Robalino Rita Almeida Jere Behrman 49

Why Do Markers Fail in the Provision of Training and How Can Policies Help? 50

Why Do Governments Also Fail in the Provision of Training? 58

Conclusion 62

Notes 64

References 65

Chapter 3 Pre-Employment Technical and Vocational Education and Training: Fostering Relevance, Effectiveness, and Efficiency Jee-Pend Tan Yoo-Jeung Joy Nam 67

Introduction 67

Participation in Pre-Employment TVET 69

Labor Market Outcomes of TVET Programs 71

Skills Demand and Skills Acquisition through Pre-Employment TVET 76

Policy Challenges in Pre-Employment TVET 78

Conclusion 93

Notes 94

References 97

Annex: Detailed Date Sources for Table 3.1 103

Chapter 4 Employer-Provided Training: Patterns and Incentives for Building Skills for Higher Productivity Rita Almeida Yoonyoung Cho 105

On-the-Job Training: What We Know and Where We Are 108

Promoting On-the-Job Training 116

Conclusion 126

Notes 128

References 130

Chapter 5 Training Programs for the Unemployed, Low-Income, and Low-Skilled Workers Jochen Kluve Friederike Rother María Laura Sánchez Puerta 133

A Typology of Target Populations for Training Programs 134

Training-Related Active Labor Market Policies around the World 143

Addressing Market Failures in the Provision of Training 146

Toward a Blueprint for Training-Related ALMPs 161

Conclusion 164

Notes 165

References 166

Boxes

1.1 Defining Job-Relevant Skills and Acknowledging the Boundaries of Job Training Policies 13

1.2 Recent Developments in International Skills Assessments 35

1.3 Identifying Market Failures through Impact Evaluations: Spotlight on Turkey 37

2.1 Looking at the Hospitality and Construction Sectors in Cambodia: Skills Gaps and Mismatches for University Graduates 55

2.2 Challenges in National Training Funds to Promote Job-Relevant Skills 58

3.1 Employers' Views on the Role of Pre-Employment Vocational Training in England and Poland 79

3.2 Demand-Led Pre-Employment TVET for Economic Growth in Singapore 83

3.3 Private Sector-Led Pre-Employment TVET for Construction Workers in India 87

4.1 Germany: An Institutional Arrangement for Contractibility 117

4.2 The Republic of Korea: A Training Consortium for Small and Medium Enterprises 121

4.3 Kenya: Training Vouchers for Small and Medium Enterprises 123

4.4 Mexico: Building in Monitoring and Evaluation Systems 125

5.1 Benefits and Costs of the Jóvenes Training Programs for Unskilled Youths in Latin America 148

5.2 Benin Support Project for the Development of On-the-Job Vocational Training 150

5.3 Training and Public Works in Argentina and El Salvador 153

5.4 Promoting Self-Employment Training in the Middle East and North Africa 156

5.5 Training and Retraining for Displaced Workers in Romania 157

5.6 The New Deal for Young People in the United Kingdom 159

Figures

1.1 Demand for Different Types of Skills in the United States, 1960-2002 12

1.2 Reasons for Market Failures 15

2.1 Degree of Competition in a Skills Market and the Poaching Externality 52

B2.1.1 Vocational Training Skills Gap 55

B2.1.2 Foreign Language Proficiency and Behavioral Skills Gaps 56

2.2 The Main Actors in the Provision of Skills 60

3.1 Share of TVET Enrollments at the Upper Secondary Level, by Region and in Relation to Per Capita GDP 70

3.2 Employment and Earnings among Graduates of TVET and Academic Programs, OECD Countries, 2007 72

3.3 Training Programs and the Building of Job-Relevant Skills 78

B3.1.1 Employability Skills Prioritized by English and Polish Employers, 2008 and 2009, Respectively 79

B3.2.1 Evolution of EDB's Skills Development Schemes, 1972-93 84

4.1 Training Incidence, Economic Development, and Human Capital 113

4.2 Reasons for Not Investing in OJT in Central America 115

5.1 Level of Education of the Labor Force by GDP per Capita 140

5.2 Decompositions and Projections of the Labor Force by Level of Education 138

5.3 Unemployment Risks for Formal and Informal Sector Workers in Brazil 142

5.4 Regional Breakdown of Evaluations of Training Programs for Low-Skilled and Unskilled Workers 145

5.5 An Integrated Training System for Unemployed, Low-Income, and Low-Skilled Workers 162

Tables

2.1 The Training Market: Market Failures and Suggested Policy Interventions 50

2.2 The Training Market: Government Failures and Policy Recommendations 59

3.1 Returns to TVET and Other Labor Market Outcomes in Selected Developing Countries 73

4.1 Effects of OJT on Wages and Productivity: Evidence from Selected Countries 110

4.2 Summary of Market Failures in OJT and the Corresponding Policies 127

5.1 Unemployment Rates by Level of Education, Regional Aggregates 140

5.2 Suggested Policy Interventions by Target Group and Training Market Failures 144

5.3 Incidence of Evaluations of Training Programs by Target Group 144

B5.1.1 Impact and Cost-Benefit Analysis of the Jóvenes Programs in Latin America 148