| Skills acquisition is vital for an economy to compete and grow, particularly in an era of economic integration and technological change. Skill needs are widespread in most developing countries - they are not only demanded by the modern wage sector but also by the agricultural and informal sectors. Vocational Education and Training (VET) is a direct means of providing workers with skills more relevant to the evolving needs of employers and the economy. The World Bank works closely with governments to develop efficient, cost-effective, and equitable training systems, and provides policy advice and support for VET reform in the training sub-sector. Related Employment Policy Primer Papers   The Incentives to Invest in Job Training: Do Strict Labor Codes Influence this Decision? (290kb pdf)
Social Protection Discussion Paper No. 0832
Rita Almeida and Reyes Aterido
October 2008
This paper studies the link between labor market regulations and the incentives of firms to invest in the human capital of their employees. The authors explore a firm level data set across several developing countries and compare the supply of formal training programs for firms exposed to different degrees of de facto labor regulations. The findings show that a more flexible labor code tends to be associated with a smaller investment in job training. However, this effect is small and heterogeneous. Reforms that simultaneously accelerate the diffusion of temporary contracts and increase the protection of permanent workers tend to generate negative effects on the firm’s investment in human capital.  The Return to Firm Investments in Human Capital (313kb pdf)
Social Protection Discussion Paper No. 0822
Almeida, Rita and Pedro Carneiro
June 2008 In this paper, the authors estimate the rate of return to firm investments in human capital in the form of formal job training. The authors use a panel of large firms with detailed information on the duration of training, the direct costs of training, and several firm characteristics. The author's estimates of the return to training are substantial (8.6%) for those providing training. Results suggest that formal job training is a good investment for these firms possibly yielding comparable returns to either investments in physical capital or investments in schooling.  Effectiveness of Lending for Vocational Education and Training: Lessons from World Bank Experience (194KB PDF)
Social Protection Discussion Paper No. 0222
Canagarajah, S., A. Dar, R. Nording and D. Raju
September 2002
This paper reviews the Bank involvement in the vocational education and training sub-sector in the 1990s. This paper aims to do just that by mainly seeking answers to the following questions: - How has the Bank performed in its lending services to its clients in VET?
- How have VET projects performed in terms of meeting stated objectives?
- What factors led to the success or failure of Bank operations?
Based on what has been learned, this paper provides suggestions about how the performance of future VET interventions can be improved. This review concerns itself primarily with implementation performance and proposes measures to improve project outcomes.
 Training Levies: Rationale and Evidence From Evaluations (88kb pdf)
by Dar, Amit, Sudharshan Canagarajah, and Paud Murphy, World Bank
June 2001
 Skills for Productivity: Vocational Education and Training in Developing Countries
Middleton, John, Adrian Ziderman, and Arvil Van Adams, World Bank
June 1993
 Vocational and Technical Education and Training
Middleton, John, Adrian Ziderman, and Arvil Van Adams, World Bank
May 1991
 Vocational Education and Training: A Review of World Bank Investment
Middleton, John, and Terri Demsky, World Bank
July 1988
Related Employment Policy Primer Note  Training Levies: Evidence from Evaluations (91KB PDF)
Employment Policy Primer Note No. 6, April 2004
Other Related Resources
 Are Skills Rewarded in Sub-Saharan Africa? Determinants of Wages and Productivity in the Manufacturing Sector
World Bank Policy Research Working Paper No. 4688
Louise Fox and Ana Maria Oviedo
August 2008 Using recent matched employer-employee data from the manufacturing sector in 20 Sub-Saharan African countries, the authors analyze how the supply of skills and legal origin of the country affect the wage setting process. The wage analysis yields three main findings. First, increasing returns to education, especially for older workers, suggest that the expansion of education in Africa has reduced returns to education for entrants in the labor market. Second, age effects matter not just for returns to education, but also for the wage setting process more generally. In particular, in civil-law countries, returns to seniority are rewarded only after a certain age. Third, workers exercise some power in the wage setting process but their influence varies by linguistic group. In common-law countries, union presence benefits all workers equally, not just members, whereas in civil-law countries, only older members enjoy higher wages. The authors also contrast wage premia with relative marginal productivities for different age, occupation, and education categories. The findings show that in general, older, highly educated, and highly ranked workers receive wage premia that do not reflect a higher relative marginal productivity. Â Special Feature: Vocational Skills Development in Sub-Saharan Africa
This series of studies reviews the state of skills development in Sub-Saharan Africa, 10 years after the publication of the seminal World Bank research on the subject, "Vocational and Technical Education and Training: A World Bank Policy Paper".
 Multinational Enterprises & Training
The goal of this set of studies is to identify policy instruments to leverage foreign direct investment (FDI) for greater contribution to the knowledge economy. Specifically, the relative importance of skill level in attracting FDI and the evaluation of corporate social responsibility (CSR) potential to contribute to MNEs training will be explored. Top |
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