Is There a Role for Public Support of Incumbent Worker On-the-Job Training?

Authors

Kevin Hollenbeck, W.E. Upjohn Institute for Employment ResearchFollow

Issue Date

January 2008

Abstract

States have begun to use training subsidies as a policy tool for employment retention and business competitiveness. This paper summarizes a survey of states concerning their investments in incumbent worker training. Altogether, states are investing about $550 to $800 million, which is perhaps one percent or less of total private sector training costs. The paper further discusses a study conducted for one state in which we found significant fiscal returns implying that underinvestment of public funds for incumbent worker training may be occurring. In this state, primary sector jobs were created or retained at a public cost of less than $9,000 per job; a cost that rivals or bests most economic development initiatives.

Series

Policy Paper No. 2008-001

DOI

10.17848/pol2008-001

Sponsorship

This paper builds on work that was done under contract to Commonwealth Corporation, Boston, MA, an administrative entity for the Massachusetts Department of Workforce Development, and work that was done under contract to the Indiana Department of Workforce Development.

Keywords

on the job training, workplace training, OJT, state policy, training subsidies, incumbent worker training, economic development, employment retention

Subject Areas

ECONOMIC DEVELOPMENT; Regional policy and planning; Business and tax incentives; WORKFORCE DEVELOPMENT; On the job training; Incumbent worker training