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.
Vocational Skills Development in Sub-Saharan Africa
World Bank - Education
World Bank - Lifelong Learning
Employability and Productivity among Older Workers: A Policy Framework and Evidence from Latin America (538kb pdf)
Social Protection Discussion Paper No. 1113; Publication Date: 07/11
by Edmundo Murrugarra
As Latin American and the Caribbean countries face rapid aging transitions, the economic contribution of older workers would need to be strengthened. This paper uses household data from Brazil and Mexico to characterize labor market behavior of older workers, such as participation, sectoral and type of employment, and productivity, to identify critical areas for policy intervention. The paper also discusses other social policy related issues like health, remittances, and family arrangements. This paper suggests three areas for labor policy: (i) adjusting social security incentives to extend working life and postpone formal retirement; (ii) adjustments to labor market regulations to increase employment flexibility, smoothing the transition into retirement; and (iii) addressing skill needs through (re)training to maintain productivity and employability. This paper reviews existing evidence on these policy interventions in industrial and developing countries, and suggests areas for future analytical work.
Advancing Adult Learning in Eastern Europe & Central Asia (647kb pdf)
Social Protection Discussion Paper No. 1108
by Christian Bodewig and Sarojini Hirshleifer
In recent years skill shortages in the labor force have become a key challenge in many countries in Eastern Europe and Central Asia (ECA), suggesting that policies for continuous upgrading of skills of the workforce are increasingly important. OECD countries have identified adult education and training as a critical part of their education policy agenda, yet in many ECA countries this issue has remained peripheral to the efforts to reform education and training systems. This paper presents available evidence on the extent and patterns of lifelong learning in ECA. It argues that advancing adult education and training in ECA is important not only to meet the new skills demands but also to respond to a rapidly worsening demographic outlook across most of the region. While it is not equally important for all ECA countries, adult education and training should be high on the agenda of those ECA economies that are closest to the technological frontier and facing a demographic decline, such as the new EU Member States and Russia. The paper lays out a framework for government action to advance adult learning in ECA through a mix consisting of policy coordination between government and the enterprise sector, a sound regulatory regime and appropriate financial incentives.
The Investment in Job Training: Why are SMEs Lagging So Much Behind?
Social Protection Discussion Paper No. 1004
by Rita K. Almeida and Reyes Aterido
This paper analyzes the link between firm size and the investment in job training by employers. Using a large firm level data set across 99 developing countries, the authors show that a strong and positive correlation in the investment in job training and firm size is a robust statistical finding both within and across countries with very different institutions and level of development. However, the findings do not support the view that this difference is mostly driven by market imperfections disproportionally affecting SMEs. Rather, the evidence is supportive of SMEs having a smaller expected return from the investment in job training than larger firms. Therefore, the findings call for caution when designing pro-SME policies fostering the investment in on the job training.
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
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
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
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
Skills for Productivity: Vocational Education and Training in Developing Countries
Middleton, John, Adrian Ziderman, and Arvil Van Adams, World Bank
Vocational and Technical Education and Training
Middleton, John, Adrian Ziderman, and Arvil Van Adams, World Bank
Vocational Education and Training: A Review of World Bank Investment
Middleton, John, and Terri Demsky, World Bank
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
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.
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".