Year: 2004
Type: conference-paper
Abstract: Governments across much of the developed world are concerned to increase labour market activity\nrates and employment among older workers. A variety of policies have been advocated including the\nimprovement of education and training provision. This paper evaluates the role that such provision might\nplay. Clearly it is always designed to, and usually succeeds in, increasing the human capital of its\nrecipients, in the sense that, to varying degrees, knowledge and skills are enhanced. However, if this is to\nimprove the labour market position of individuals, the extra human capital must be economically\nproductive and throughout the paper the emphasis is on this. The paper briefly outlines the nature of\nlabour market disadvantage suffered by older workers, who are defined as those over 54. It goes on to\ndiscuss the causes of the disadvantage and considers whether better education and training might alleviate\nit. It evaluates some policy initiatives and concludes that education and training have only a limited role to\nplay in the absence of accompanying policy measures.\nAmongst older workers, inactivity and unemployment are particularly heavily concentrated amongst\nthe less educated and the less skilled. This is often attributed to globalisation, skill-biased technological\nprogress or job-queuing. Despite such explanations, it is not clear what role lack of skill per se plays in this\ndisadvantage. Labour market regulations, seniority or age related-wages, moral hazard, the attitudes of\nolder workers themselves and skills obsolescence, as well as age discrimination, may help to explain the\nunderprivileged position of older workers in the labour market. In addition to having low employment and\nactivity rates, older workers receive little training. What is eminently clear is that the problem is\nparticularly concentrated amongst those who are less educated or skilled, amongst those who missed out on\neducation and training early in their lives - once at the bottom of the heap, always at the bottom of the\nheap.\nOECD Governments are concerned to bring older workers out of unemployment into employment and\nout of inactivity into employment. They embrace training as one possible means of achieving this aim.\nThe available evidence suggests two overarching conclusions – one general and one specific to the paper’s\nimmediate concerns. The general one is that the relationship between training and a country’s economic\nsuccess is more problematic and complex than often apparently appreciated by policy makers. For the\nindividual, education and training on the whole improve labour market prospects. But there are\nqualifications. Not all education and training is equally powerful in achieving this; in the UK, for example,\nshort episodes of work-based training or training when unemployed have limited impact, whilst returns to\nvocationally orientated courses are less than to academic ones. The specific conclusion is that one could\nnot hope to offset decades of labour market disadvantage by giving an individual a couple of weeks or\neven a couple of months training. This suggests the need to be modest in one’s aims.\nThe best available evidence, particularly from the active manpower policy literature, suggests very\nstrongly that training programmes, on their own, are of limited use in bringing people out of\nunemployment or inactivity into jobs. Of prime importance are subsidies and targeted job search and job\nplacement programmes; and even here there are risks of deadweight loss and of ineffectiveness if they are\nnot part of a larger policy package. Even if training can, in principle, help to bring people back into work,\nthe jobs they acquire may not be brilliant ones. This implies a problem of incentives. Depending on the\nsocial security/pension regime prevailing, workers may not be inclined to take on low-paying or low status\njobs. Indiscriminately providing training, in the absence of other linked initiatives, would be wasteful.\nThe paper stresses the importance of continuous learning during the whole of working life as a means\nof reducing the dangers of labour market disadvantage in the older years. It also argues that formal\n3\ntraining episodes are not the only route to continuous learning. Informal learning and development are also\ncritical, and these are closely related to broader aspects of job quality.\nFor those who are in work, lack of training may be at least as much a symptom as a cause of job\ninsecurity. The problem is not only making the workers more attractive, it is also a matter of making the\njobs on offer more attractive. The more high quality jobs there are available, the greater the demand for\nskill and the more training and development that will be in offer. Though some of it will be specific to\neach employing organisation, much of it is likely to be transferable, even in the absence of government\nintervention to deal with possible externalities. Without a large number of high quality jobs, some people\nare going to suffer. Although an increase in the number of well-trained people might enable some\nemployers to enhance the quality of some jobs, on its own training is unlikely to dramatically alter the\nquality mix of jobs on offer. The key to preventing the older worker suffering disproportionately in such\ncircumstances almost certainly lies elsewhere than in training. The lack of training received by older\nworkers is dominantly a symptom of broader problems they face. And it is these broader problems that\ndeserve prime attention. One limited role that training might play, though almost certainly it would have to\nbe heavily subsidised by governments, would be to prepare older workers for self-employment as an\nalternative to the hostile climate they face as employees.
Authors: Ken Mayhew, Bob Rijkers
Language: English
Subfield: Demography
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2172565787