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Education and training among the working-age population has become an increasingly important policy issue as working lives have lengthened and the pace of technological change has quickened. This paper describes the effects of a reform that replaced a supply-driven model, in which government selected the number and providers of publicly subsidised vocational education and training (VET), with a demand-driven approach that broadened access to adult training and gave working-age individuals greater freedom of VET course choice. Difference-in-differences analysis reveals that the large-scale reform, which was introduced in the Australian state of Victoria from 2009, substantively increased participation in VET among the population aged 25-54, and corresponded with an improved match between VET courses taken and objective ex ante measures of labour market demand. Indeed, the scheme was so popular that it resulted in a budget over-run by 2012 of $400 million (AUD, on a total budget of $1.3 billion).

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The decline of Australian manufacturing, from employing one in four workers in the 1960s to one in 12 workers today, is a stark example of the changing economic conditions that working Australians face. In this context, training undertaken throughout the working lifetime can be crucially important for developing and maintaining marketable skills. In contrast to the extensive literature that has explored education and training amongst younger people, however, training later in life has received relatively little attention. This distinction is important because young people at the beginning of their working lifetime are likely to face very different motivations toward training than older people with substantial work experience. This report, funded under the 2014 National Vocational Education and Training Research (NVETR) program, aims to improve the understanding of the responsiveness of mature-age workers, aged 25 and over, to government subsidies for up-skilling. A key focus is in measuring different enrolment and course choice responses, especially different responses between employed and unemployed individuals. Results from the analysis are important in identifying groups of individuals that may benefit from targeted support. This conference will be an important forum for [the authors] to present preliminary findings for discussion.

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