IZA World of Labor

Vocational education, training skills, and lifelong learning

  • Does broadband infrastructure boost employment?

    Broadband infrastructure has differing effects on workers of different skills

    Oliver Falck, March 2017
    Broadband infrastructure enables fast access to the internet, which, evidence suggests, has significant effects on economic growth. However, labor market related issues have not received as much consideration. These include quantifying employment effects of broadband infrastructure roll-out and questions about who exactly are the winners and losers in the labor market, and whether skills in information and communication technologies (ICT) are reflected in labor market outcomes such as wages. Understanding these complementary issues allows for policy conclusions that go beyond simply encouraging the subsidization of broadband internet infrastructure.
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  • Skills or jobs: Which comes first?

    Jobs require skills, but they also build skills and create a demand for them

    Jesko Hentschel, February 2017
    Skills are widely regarded as being necessary for boosting productivity, stimulating innovation, and creating new jobs, while skill mismatches are often cited as being responsible for a lack of dynamism in the labor market. However, heavy investments in technical and vocational training programs are seldom a “silver bullet.” Recent evidence on skill building not only points to the core importance of foundational skills (both cognitive and social) for success in the labor market, but also emphasizes how jobs themselves can lead to learning and shape social competencies that, in turn, ignite innovation and create more jobs.
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  • What effect do vocational training vouchers have on the unemployed?

    Vouchers can create a market for training but may lengthen participants’ unemployment duration

    Anthony Strittmatter, November 2016
    The objective of providing vocational training for the unemployed is to increase their chances of re-employment and human capital accumulation. In comparison to mandatory course assignment by case workers, the awarding of vouchers increases recipients’ freedom to choose between different courses and makes non-redemption a possibility. In addition, vouchers may introduce market mechanisms between training providers. However, empirical evidence suggests that voucher allocation mechanisms prolong the unemployment duration of training participants. But, after an initial period of deterioration, better long-term employment opportunities are possible.
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  • Do youths graduating in a recession incur permanent losses?

    Penalties may last ten years or more, especially for high-educated youth and in rigid labor markets

    Bart Cockx, August 2016
    The Great Recession that began in 2008–2009 dramatically increased youth unemployment. But did it have long-lasting, adverse effects on the careers of youths? Are cohorts that graduate during a recession doomed to fall permanently behind those that graduate at other times? Are the impacts different for low- and high-educated individuals? If recessions impose penalties that persist over time, then more government outlays are justified to stabilize economic activity. Scientific evidence from a variety of countries shows that rigid labor markets can reinforce the persistence of these setbacks, which has important policy implications.
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  • The dynamics of training programs for the unemployed

    Job-search training and occupational skills training are both effective

    Aderonke Osikominu, July 2016
    Time plays an important role in both the design and interpretation of evaluation studies of training programs. While the start and duration of a training program are closely linked to the evolution of job opportunities, the impact of training programs in the short and longer term changes over time. Neglecting these “dynamics” could lead to an unduly negative assessment of the effects of certain training schemes. Therefore, a better understanding of the dynamic relationship between different types of training and their respective labor market outcomes is essential for a better design and interpretation of evaluation studies.
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  • Performance measures and worker productivity

    Choosing the right performance measures can inform and improve decision-making in policy and management

    Jan Sauermann, May 2016
    Measuring workers’ productivity is important for public policy and private-sector decision-making. Due to a lack of reliable methods to determine workers’ productivity, firms often use specific performance measures, such as how different incentives affect employees’ behavior. The public sector also uses these measures to monitor and evaluate personnel, such as teachers. To select the right performance measures, and as a result design better employment contracts and improve productivity, policymakers and managers need to understand the advantages and disadvantages of the available metrics.
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  • How can temporary work agencies provide more training?

    Staffing agencies could play a more prominent role in the provision of training for the low qualified and previously unemployed

    Alexander Spermann, April 2016
    Temporary work agencies use training as a recruitment and retention argument when qualified labor is scarce. However, short job assignments present a major obstacle for employers and employees to increase investment in training. As temporary agency workers are mainly low-qualified and often previously unemployed, paid work in combination with training should lead to more sustainable employment. Adjustments in labor market institutions could make the provision of training more attractive for both staffing agencies and temporary agency workers.
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  • The importance of informal learning at work

    On-the-job learning is more important for workers’ human capital development than formal training

    Andries De Grip, June 2015
    Although early human capital theory recognized the relevance of workers’ experience, its focus was on education and formal training. Recent studies find that much of the performance of newly hired workers is driven by learning by doing or learning from peers or supervisors in the workplace. Descriptive data show that workers learn a lot from the various tasks they perform on the job. Informal learning at work seems to be relevant for all age groups, although it drives more of the performance of younger workers. Informal learning is far more important for workers’ human capital development than formal training courses.
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  • Who benefits from firm-sponsored training?

    Firm-sponsored training benefits both workers and firms through higher wages, increased productivity and innovation

    Benoit Dostie, April 2015
    Workers participating in firm-sponsored training receive higher wages as a result. But given that firms pay the majority of costs for training, shouldn’t they also benefit? Empirical evidence shows that this is in fact the case. Firm-sponsored training leads to higher productivity levels and increased innovation, both of which benefit the firm. Training can also be complementary to, and enhance, other types of firm investment, particularly in physical capital, such as information and communication technology (ICT), and in organizational capital, such as the implementation of high-performance workplace practices.
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  • Is training effective for older workers?

    Training programs that meet the learning needs of older workers can improve their employability

    Matteo Picchio, January 2015
    The labor market position of older workers is cause for concern in many industrialized countries. Rapid population aging is challenging pension systems. The recent economic crisis has forced many older adults out of the workforce, into either pre-retirement or non-employment. Encouraging people to work longer and fostering the employability of older workers have become priorities for policymakers. Training specifically designed for older workers might help attain these goals, since it may refresh human capital and reduce the pay–productivity gap. Training older workers might also benefit employers and society as a whole.
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