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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. 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. 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.
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