Manpower Training: Theory and Policy

90 Pages·1978·7.378 MB·English

by  Adrian Ziderman (auth.)

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Adrian Ziderman: MANPOWER TRAINING: THEORY AND POLICY
Manpower Training
Theory and Policy
ADRIAN ZIDERMAN
Associate Professor of Economics
Bar-llan University, Israel
M
© Adrian Ziderman 1978
All rights reserved. No part of this publication may be reproduced or
transmitted, in any form or by any means, without permission.
First published 1978 by
THE MACMILLAN PRESS LTD
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A member of the Staples Printing Group
British Library Cataloguing in Publication Data
Ziderman, Adrian
Manpower training. -(Macmillan studies in economics).
I. Employees, Training of - Great Britain
2. Occupational training - Great Britain
I. Title
331.2'592'0941 HF5549.5. T7
ISBN 978-0-333-17435-7 ISBN 978-1-349-02413-1 (eBook)
DOI 10.1007/978-1-349-02413-1
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Contents
Acknowledgements 7
Introduction 9
2 The Economics of Inservice Training 12
3 Self-Investment in Schooling and Training 26
4 Government Policy towards Inservice Training 38
5 The Rationale for State Provision of Training 50
6 The Evaluation of Government Training Programmes 55
7 Government Training Programmes in Britain 77
Bibliography 83
To my mother,
for her goodness
Acknowledgements
Much of the material in this book arises from research carried out
over a number of years while a member of the Economics Depart
ment, Queen Mary College (University of London). lowe a debt to
my former colleagues and especially to Professor Maurice Peston,
then head of department, for his advice, encouragement and
numerous kindnesses shown. The Book Publishing Committee of
Bar-Ilan University generously met the expenses of preparing the
manuscript for publication. My friend Dr Oded Stark, of Bar-Ilan
University, combed through the final version of the text and offered a
number of last-minute improvements; these I have gratefully in
corporated into the text. Finally, to Macmillan, I acknowledge the
extreme patience shown despite seemingly endless delays in writing
this book, consequent on my move to Israel.
A.Z.
1 Introduction
This book approaches the economics of training from the two
contrasting viewpoints of theory and policy applications. Although it
attempts to paint a wide canvas and cover most of the relevant areas
of the subject, the focus adopted is a particular one: that which sees
training as a branch of human-capital economics. Given this
emphasis, it is particularly concerned with the training-investment
decision. How is training financed? What is the role of individual self
investment in total training provision? Why does the Government
intervene, both in private training markets and through state
provision of training (and retraining) schemes? How can the costs
and benefits of these schemes be evaluated?
The importance of industrial training has been recognised by a
long line of economists going back to Adam Smith. Indeed, Marshall
devoted a whole chapter to industrial training in his Principles [1].
However, the extended study of the economics of manpower training
is relatively recent, beginning only in the early 1960s. As yet, most of
this material is inaccessibly scattered in a wide range of specialised
academic journals, in government and other official reports and in
unpublished research papers. A major aim of the present book is,
within the compass of a small volume, to bring together and
reinterpret the main developments in this new but rapidly expanding
field of economics.
The definition of training used here is a broad one: it encompasses
the various forms of training received in job situations (formal off
the-job training programmes, formal and informal training on the
job, including the least formal of all, 'learning by experience') - this
we shall refer to as 'inservice training'; it also covers formal training
provided outside the job context by specialised (usually government
run) training agencies. The diverse nature of the training activity
poses a particular problem in the present context, in that it virtually
9
defies accurate measurement of the extent of training provision in
Britain, the amount of economic resources devoted to it and its over
all costs. A recent review of the scope of industrial training in Britain
(Woodhall [2]) sums up the situation in this way:
A number of rough estimates of the costs of training in particular
industries suggest 3 to 4 per cent of total wages and salaries, and if
this proportion is applied to the total wage and salary bill for the
economy as a whole (£28,000 million in 1970), the resulting total
cost of training would be £850 million to £ 1,160 million. There is
very little evidence to support or refute any of these figures. They
represent nothing more than the wildest guesses. What they do is to
emphasize the extent of our ignorance about the costs of inservice
training (pp. 86-7).
Why is there such a yawning gap here? No doubt a contributory
factor is the extraordinary variety of forms of training to be found in
practice, widely diffused amongst virtually all firms in the country.
The more obvious problems of data collection and collation are
compounded still further by the small number of firms that even
attempt to keep adequate accounts of their training activities. When
they do so, the figures are frequently less than useful, in that
insufficient allowance, if any at all, is made for those opportunity
costs of training which do not take the form of actual expenditures:
imputed rents, adequate allocation of overheads, including manage
ment time, and, perhaps most important of all, net output forgone
during the training process. The force of this argument is only
partially mitigated by the statutory data provision required by the
various industrial training boards, established a decade ago (see
Chapter 4).
A more basic factor explaining our lack of information about the
extent of training is, perhaps, the nature of the training process itself.
Most forms of industrial training may be regarded as output
produced concurrently, in one way or another, with the products of
the companies in question. Much of this training takes the form of a
'joint product' produced unavoidably together with a firm's regular
output: workers become trained by learning from example, they gain
general experience or they are exposed to learning situations
10