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In this paper, the author argues that the obsolescence of human capital, or the deterioration of the skills workers have acquired in the past, is central to the key challenge for western economies to achieve a knowledge-based society through lifelong learning. The first section outlines a typology of the various possible causes of human capital obsolescence, in which five different kinds of human capital obsolescence are identified: the wear of skills due to ageing, or illness that may be related to working conditions; the atrophy of skills due to insufficient use; job-specific obsolescence due to technological and organisational change; sector-specific obsolescence due to shifts in employment; and firm-specific skills obsolescence due to displacement. This is followed by a discussion of the different ways in which the obsolescence of human capital can be measured: (1) objective method: testing; (2) subjective method: asking workers or their employers; (3) workers' wages; and (4) the probability of losing their jobs. The next section reviews the evidence on skills obsolescence that exists in the literature. An example of some empirical indicators of the potential risks of human capital obsolescence for workers in the various sectors of industry in the Netherlands is presented. The discussion then moves to what kinds of learning or training activities could be remedies for the different kinds of human capital obsolescence and some empirical evidence on training participation in the various sectors of industry in the Netherlands is presented. Training participation in the various sectors of industry in relation to the specific potential risks of human capital obsolescence in each sector is discussed, with particular reference to older workers. The author concludes with some policy issues.

Selected papers from the conference are indexed from TD/TNC 87.81 to TD/TNC 87.84. Show less

This paper is an overview of the main issues for discussion at the OECD LEED Conference held in 2004 in Copenhagen, Denmark. It contains an introduction, which states the purposes of the conference: to critically examine and compare local instruments and partnerships set up to upgrade the skills of the low qualified; to establish the role they play in broader area-based economic and employment development strategies; to discuss their relative success and limitations to date; and to propose possible ways to improve design and implementation strategies. The four sessions of the conference are outlined. They are: (1) the challenges of increasing workers' skills in the 21st century: a debate; (2) the instruments of public policy intervention; (3) the institutional arrangements of public intervention; and (4) to act now: what lessons?: a debate. Show less

This [conference] paper provides a tentative review of the literature that estimates wage returns to training. It discusses both the measurement and estimation issues. The fundamental problem concerning the recovery of the causal effect of training on earnings lies in the correction for selectivity into training. The discussion of the empirical literature emphasises the size of the estimated returns; something which has been largely neglected in the literature. It is argued that traditional studies that depend on differencing (fixed effect) methods where non-participants are used as a comparison group results in high return estimates. On the basis of these high returns, some have argued that there is substantial under-investment and therefore scope for public intervention. Such under-investment could arise because of, for example, hold-up or liquidity constraints. The paper then shows that studies which exploit arguably exogenous variation in training participation find much smaller wage effects of training. The evidence collected in this paper calls into question the case for under-investment based on return studies. There is other evidence which suggests that under-investment may be less severe than previously believed. First, recent literature in experimental economics shows that individuals are often motivated by reciprocity and fairness considerations which are typically ignored in standard human capital models, while reciprocity can alleviate under-investment. Second, recent literature emphasising market imperfections also shows that imperfections may give employers more incentives than previously thought to invest in the general training of their employees. The paper concludes by calling for further study of training mechanisms and subsequent outcomes. Some potential avenues for research in this area are given.

Published abstract.

Selected papers from the conference are indexed from TD/TNC 87.81 to TD/TNC 87.84. Show less

'Education and Training 2010' is a long-term project governed by the European Commission which aims to contribute to the Lisbon Strategy in the area of education and training. The goal of the project is to see Europe recognised by 2010 as the world leader in terms of the quality of its education and training systems. This joint document from the Education Council and the European Commission addresses the detailed work program published in 2002 (indexed at TD/TNC 80.531), which identified 13 major objectives of education and training systems, and assigned initial indicators to them. This document has been created in response to the Barcelona European Council's request for a report on the implementation of the work program, and outlines progress made to date, identifies future challenges and proposes measures designed to ensure that the set objectives are achieved. Findings of this report indicate that, if the concrete objectives are to be attained before the target date of 2010, the pace of reforms will need to be accelerated. It is the contention of the authors that the profile of 'Education and Training 2010' needs to be lifted at both national and community levels. Three key priority areas are also highlighted in this report, and it is strongly emphasised that they be acted upon without delay: (1) focus reform and investment on the key areas for the knowledge-based society; (2) make lifelong learning a concrete reality; (3) establish a Europe of education and training.

Selected documents relating to ‘Education and Training 2010’ are indexed from TD/TNC 80.530 to TD/TNC 80.541. Show less

This conference paper evaluates the role of improved education and training provision in increasing the labour market activity rates and employment among older workers. The authors argue that the increase in human capital, or enhanced knowledge and skills, resulting from this provision needs to be economically productive if it is to improve the labour market position of recipients. The paper focuses on this and begins by providing a brief outline of the nature of labour market disadvantage suffered by older workers, who are defined as those over 54 years of age. The authors then discuss the causes of the disadvantage and consider whether better education and training might alleviate the problem. Some policy initiatives are evaluated and it is concluded that education and training have only a limited role to play unless there are accompanying policy measures.

Selected papers from the conference are indexed from TD/TNC 87.81 to TD/TNC 87.84. Show less

In December 2004, the Education Ministers of 32 European countries and representatives from the European Commission (EC) and the European Training Foundation (ETF) met in Maastricht to take stock of European cooperation in the field of vocational education and training (VET) following the Copenhagen declaration (indexed at TD/IRD 88.258). The intention of the Copenhagen declaration was to: improve the image and attractiveness of VET and learning; achieve high levels of quality and innovation in VET systems; link VET with new labour market requirements resulting from the knowledge society and demographic change; and improve social cohesion and labour market participation. This document sets out the progress made since, and describes the new strategies and priorities of the European countries on education and training for the next two years. Among the priorities are: continuing to set up common reference instruments to accentuate transparency (of the Europass variety); facilitating private and public investment; breathing new life into the role of teachers and trainers; and putting together reliable and relevant statistics. Show less

This conference paper focuses on training provided by firms. Many empirical studies demonstrate considerable variation across countries and across socio-economic groups in training participation rates, with Nordic countries showing higher participation than Southern European countries, and low-educated and older workers generally participating less than other groups in training activities. To investigate the reasons for this situation, the authors examine both the theoretical underpinnings and the empirical evidence in support of the under-provision of training. Under-provision is used to denote when 'training is below its efficient level, which equalises marginal social benefits to marginal social costs'. The authors argue that, if firms invest in general training, important evidence on under-provision can be gathered by examining the relationship between investment in training and labour turnover. They find evidence of a 'statistically significant and positive relationship between employer-provided training and subsequent turnover' for Denmark, Belgium, France and the UK. In the remaining countries the relationship is either not statistically significant or negative and statistically significant, as in the case of Finland. The evidence that, in no country except Finland, training significantly decreases the quit rate is suggestive of under-provision. The authors suggest that policies which aim at increasing the level of training above the market level should be designed to affect either supply or demand, or both.

Selected papers from the conference are indexed from TD/TNC 87.81 to TD/TNC 87.84. Show less

This publication results from major reviews of national career guidance policies carried out by the OECD and the European Commission (EC) during 2001-2003. Australia, Austria, Canada, the Czech Republic, Denmark, Finland, Germany, Ireland, Korea, Luxembourg, the Netherlands, Norway, Spain and the UK participated in the OECD review. The European Centre for the Development of Vocational Training (CEDEFOP) collected data from Belgium, France, Greece, Iceland, Italy, Portugal and Sweden for the EC, and the European Training Foundation (ETF) gathered data from Bulgaria, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia. A review by the World Bank was undertaken in 2003 in Chile, the Philippines, Poland, Romania, Russia, South Africa and Turkey. For each country, the reviews assessed how the organisation, management and delivery of career guidance services contribute to the implementation of lifelong learning and active labour market policies. Several common themes emerged from the reviews about deficiencies in national career guidance services. Many examples of good practice exist but there are major discrepancies between service organisation and delivery, and some key public policy goals. Practical solutions are provided for policy makers to address these issues. The publication covers the major policy domains involved in developing a comprehensive framework for lifelong guidance systems: meeting the career guidance needs of young people and of adults; widening access to career guidance; improving career information; staffing and funding career guidance services; and improving strategic leadership. For each of these policy areas, the publication: describes the key challenges for policy makers in trying to improve career guidance services; provides examples of good practice and of effective responses to these challenges, based on research conducted in 36 OECD and European countries; poses the questions that policy makers need to address in responding to these challenges; and provides practical options for improving policy. Show less