The New Training Initiative—an Evaluation
Identifieur interne : 001D09 ( Istex/Corpus ); précédent : 001D08; suivant : 001D10The New Training Initiative—an Evaluation
Auteurs :Source :
- National Institute economic review [ 0027-9501 ] ; 1982-02.
English descriptors
- KwdEn :
- Adult wages, Apprentice earnings, Apprenticeship, Apprenticeship places, Average wage, Basic skills, Collective agreements, Compulsory school period, Compulsory schooling, Consultative document, Curriculum changes, Earnings survey, Economic research centre, Education system, Engineering industry training board, First step, First year, General training, Initial investment, Labour force, Local authorities, Minimum rate, Minimum rates, National institute, Other training schemes, Practical competence, Practical skills, Programme, Public expenditure, Quality objectives, Second edition, Skilled occupations, Specific training, Trade unions, Trainee, Trainee wages, Training initiative, Training places, Training system, Transferable, Transferable skills, Vocational content, Vocational education, Vocational training, White paper, White proposals, Wide range, Work experience, Young people, Young workers scheme.
- Teeft :
- Adult wages, Apprentice earnings, Apprenticeship, Apprenticeship places, Average wage, Basic skills, Collective agreements, Compulsory school period, Compulsory schooling, Consultative document, Curriculum changes, Earnings survey, Economic research centre, Education system, Engineering industry training board, First step, First year, General training, Initial investment, Labour force, Local authorities, Minimum rate, Minimum rates, National institute, Other training schemes, Practical competence, Practical skills, Programme, Public expenditure, Quality objectives, Second edition, Skilled occupations, Specific training, Trade unions, Trainee, Trainee wages, Training initiative, Training places, Training system, Transferable, Transferable skills, Vocational content, Vocational education, Vocational training, White paper, White proposals, Wide range, Work experience, Young people, Young workers scheme.
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DOI: 10.1177/002795018209900106
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The
New Training Initiative—an Evaluation
SAGE Publications, Inc.1982DOI: 10.1177/002795018209900106
The
background to the White Paper That Review
concluded that 'current training arrangements have made little advance in
securing fundamental reforms of training' (paragraph 4.34), and that 'in general,
in the traditional crafts, it is still the passage of time rather than objectively
assessed performance standards, which decides whether a trainee is accepted
as skilled' (paragraph 4.16). The object of this note is first, to assess
the economic arguments for government intervention in the provision of vocational
training as advanced in the White Paper and in an accompanying MSC document
(entitled The new training initiative: an agenda for action, hereafter referred
to as AA). It then appraises the proposals contained in the White Paper and,
finally, outlines how government policy might need to be developed if positive
results are to be achieved. The economics of vocational training Only in the
final paragraphs of the White Paper (in a brief section entitled 'Funding')
is an attempt made to provide a reasoned basis for evaluating the optimum
volume and direction of public resources to be devoted to training. However,
the White Paper draws substantially on the discussion and recommendations
of the earlier document (AA) which contains a somewhat more explicit analysis
of the issues. From these documents the government view appears to be that
one source of the deficiency in the volume of training for skilled occupations
in the UK lies in a particular form of 'market failure'- the fact that most
of the benefits of training (or the property rights acquired as a result of
training) lodge with the individual trainee rather than the employer. To the
extent that the true costs of training are borne by the employer, the potential
mobility of the trainee may deprive the firm of some of the returns from its
training investment; consequently, it is argued, this leads firms as a whole
to under-invest in training.
Both
the White Paper (obliquely) and AA point to the 'defective telescopic faculty
of I»dividuals'13) as a second source of market failure; AA refers to the
fact that 'we cannot expect firms or individuals to invest in training to
meet needs which they may not recognise or which offer no prospect of early
returns'. Youngsters are in a hurry for immediate higher wages and tend to
under-invest in 'basic vocational preparation' on moving from education into
jobs. It is perhaps less clear that employers are subject to the same disability; or, if they are, whether the state apparatus is necessarily more far-seeing
in the matter of long-term future skill requirements. Both these arguments
are quite general, and ought also to be at work elsewhere. They do not account
for what the White Paper (and a whole series of earlier MSC documents) have
characterised as the particularly low rate at which general or transferable
skills are acquired in the UK by comparison with other West European countrics-in
particular those, such as Germany or Switzerland, which rely heavily on apprenticeship
systems as an 'entry gate' to skilled manual or technical occupations. An
understanding of what has been happening in the UK is much eased by distinguishing
(following Becker, in his book on Human Capital(4)) two extreme types of training:
specific training, ~Thich is useful only in a particular firan ; and general
training which is useful in many firms. As a result of market pressures the
distribution of the costs and benefits of training between the employer and
employee will depend systematically on the nature of the training. The more
firm-specific the skill (that is to say, the less useful is that training
to the trainee once he leaves that firm), the greater is the proportion of
the initial investment that has to be borne by the firm; and the greater is
the share in subsequent productivity- gains which the firm (rather than the
trainee) will expect to capture. The more general, or transferable, the nature
of the skill acquired, the more likely it is that the trainee can market his
acquired skills elsewhere and so reap the benefits of his training; and the
less will the employer be prepared to meet the costs of that training. Consequently,
in the case of general skills, it is the employee who usually has to make
the initial investment in the form of lower wages as a trainee, etc., and
for which he will, in due course, be compensated by higher earnings in later
life.
*This Note has been
prepared by Ian Jones of the National Institute of Economic and Social Research,
as part of the research programme of the Designated Research Centre in Comparative
Industrial Structure and Efficiency sponsored by the SSRC at the NIESR. He
is grateful to colleagues at the National Institute, especially Sig Prais,
Anne Daly, Heinz Hollenstein and Chris Trinder for advice and assistance.
The note remains the full responsibility of the author.
(1)A new
training initiative: a programme for action, Cmnd 8455, December 1981.
(2)Outlook
on training; review of the employment and training act 1973, MSC,
July 1980.
(3)See Pigou,
A. C., The economics of welfare, 4th edition, Macmillan, 1932.
(4)G. S. Becker,
Human capital, (first edition 1964, second edition 1975) NBER; see also
K. Hartley, Training and retraining in industry, in Fiscal policy and
labour supply (Report of a Conference), Institute of Fiscal Studies,
1977.
7169
Within
this framework, the amount of training in specific skills depends on employers'
assessments of costs and benefits; by definition, such skills are of no value
to other employers. Training in transferable skills, (the insufficiency of
which in the UK has been the great cause of concern of the MSC) will be undertaken
with private employers or in public sector institutions depending on individuals'
assessments of their relative costs and benefits. So long as the market mechanism
works and the costs of acquiring transferable skills are borne by the employee
the recruitment by one employer of persons trained by another employer (known
as 'poaching') does not provide a reason for the emergence of a socially sub-
optimal level of transferable skills. In practice, no market works perfectly
and certainly not the various markets in labour. But it is important to understand
the nature of the imperfection, and in particular to consider in general terms
what might be expected to ensue if apprentices' wages were, for various possible
reasons, set higher than under purely competitive conditions. General social
ideals on minimum wages provide one set of reasons for such departures, and
these may be amplified more or less strongly by trade union demands for higher
apprenticeship pay; subsidies to other ways of spending the years of one's
late teens, such as grants to those in full-time higher education, or unemployment
benefits, all help to make it necessary to raise apprentices' initial pay-even
to the extent that the 'going rate' may be above their initial value to the
firm in terms of productivity. In these circumstances, an employer will tend
to concentrate on that kind of training which it pays him to undertake, namely
specific training, in which the benefits tend to remain with the employer
rather than the employee; and he will tend to cut down on general training,
because he would believe that he has to bear an unreasonable share of the
costs. It is therefore necessary to examine carefully the facts on the pay
of apprentices, though these are not easy to ascertain (the government has
not so far carried out any statistical enquiry designed specifically to cast
light on this issue). An article in the DE G~z~ette(g~ reported data for 1978
collected in an EC Labour Force Survey. This showed that the earnings of apprentices
and other full-time trainees in manual occupations in the UK were 61 per cent
of apprentices' etc. earnings to adult rates would be were not separately
identified in the survey, the ratio of apprentices' etc. earnings to adult
rate would be slightly less than this figure. Further limited evidence
on
apprenticeship pay in the UK is also available for some large firms and industry-wide
agreements in two recent Incomes Data Services (IDS) reports. (2) Two industry-wide
agreements quoted in the latter report indicate that the minimum rate over
the period of a typical four-year apprenticeship was about 70 per cent of
the adult minimum rate in engineering (in 1980) and nearly three quarters
the adult minimum rate in the construction industry (in 1981). Average adult
earnings for skilled manual ' workers (male) in these industries were considerably
greater than nationally negotiated minimum rates (by as much as a factor of
I-! 2 or more at the time of the IDS survey If apprentices in these industries
were paid only the nationally negotiated minimum rates, then apprentice earnings
would be somewhat less than a half average adult male earnings. However, both
of the IDS surveys indicate that in nearly all of the manufacturing firms
surveyed, apprentice earnings were also significantly greater (by about 25
per cent on average) than the nationally negotiated minimum rate. By comparison,
a recent OECD reportc4> stated (p. 110) that in 1978, the average training
allowance paid by employers to first year apprentices in Germany was about
a fifth of the average wage of all male workers in the private sector, rising
only to less than a third of the average wage even in the third year of apprenticeship.
(5) Information for Switzcrland~6D suggests that apprentices' earnings were
17 per cent of the average earnings of skilled manual workers. Although cross-country
comparisons of this kind are fraught with difficulties it is unlikely that
further refinement would significantly alter the picture of much narrower
differentials between apprentices' and adults' pay in the UK than in the two
continental countries. Other things being equal, we would expect differences
of this kind to be systematically related to variations in both the number
of training places offered and the level of acquisition of general or transferable
skills. Such indeed appears to be the case; table 1 shows the destination
of young people after the compulsory school period in the UK,
(1)Department
of Employment, Employment Gazette, January 1981. The evidence formed
the basis of a written Parliamentary answer by the Under Secretary at the
Depart ment of Employment,
Mr Peter Morrison, on 13 July 1981.
(2)IDS,
Apprentices' pay, Study 198, July 1979; Young workers' pay,
Study 294, November 1981.
(3)Information
from Department of Employment, New earnings survey, 1980 Part
D, Analyses by Occupation and Department of Employment, Time rates of
wages and hours of work, April 1980, both London, HMSO, 1980.
(4)OECD,
Youth without work, a report by Shirley Williams and other experts, OECD,
Paris, 1981.
(5)It is also
pointed out in Youth without work (op. cit., p.112) that in
addition to the allowances paid by employers, young people in need can receive
assistance under the Employ ment
Protection Act. The rates set depend on the age of the trainee, whether he
or she is living at home or elsewhere, and on the training institution. The
aim is to encourage young people to prefer training to unskilled work.
(6)Unpublished
tabulations kindly provided by Dr H. Hollenstein of the Economic Research
Centre, Swiss Federal Institute of Technology.
7270
Table
1. Summary of activities of young people after compulsory school period
(a)
Including ~~~~pils in the first year basic vocational training in schools.
Source: West Germany and UK; MSC; 'A new training initiative: A consultative
document' (Annex 1). Switzerland; unpublished material made available by Dr
H. HoHenstein of the Economic Research Centre, Swiss Federal Institute of
Technology.
Germany
and Switzerland. We see that in Germany and Switzerland, over 50 per cent
of the age group entered apprenticeships, compared with on!y 14 per cent in
the UK. Moreover, a further 18 per cent in Germany and 9 per cent in Switzerland
entered full-time vocational education from whence a proportion would in time
move into mainly technician training in industry. These differences in the
current flows of trainees are fully reflected in the stock of skilled craftsmen
in Britain and Germany(-) and indicate that these differences in recruitment
rates have been longstanding and persistent. It has often been noticed that
despite the apparently low level of skill differentials for adult workers
in the UK, many who would like to find apprentice jobs fail to do so. (2)
This suggests that the rates of trainee pay in the UK embodied in collective
agreements have been persistently above the market-clearing level. ~3> It
would go beyond the scope of this note to consider in detail how these cross-country
differences in pay relativities might have arisen; but they are clearly central
to any explanation of ZJI~ performance. By failing to draw adequate attention
to them, both the White Paper and MSC publications might be said to be hindering
informed debate on the factors affecting the provision of training in the
UK. Some commentators (4) have drawn attention to the highly segmented nature
of the capital market as a source of allocative inefficiency in respect of
human capital formation. Because of differences in access to funding, individuals
with equal abilities enjoy
unequal
i access to training opportunities. Hence returns at the margin are not equalised.
One aspect of capital market segmentation in the UK is that young people receiving
general training in the full-time education system receive income maintenance
grants (e.g. university grants) whereas those acquiring transferable skills
through apprenticeship or other industry-linked training schemes do not. Given
the relatively high rate of pay enjoyed by apprentices relative to non-trainee
juvenile workers,<5> and hence the very modest sacrifice of current consumption
entailed in undertaking training it is not immediately obvious that imperfections
of this kind currently contribute much to resource misallocation in the UK.
Nevertheless, the other attractions of a university education are such that
a fresh look at the disposition of public funds for income support between
full and part-time 'trainees' would be justified. The new proposals The White
Paper's proposals for the reform of vocational training attempt to improve
both quantity and quality. The provisions fall under three main headings:
(i) The injection of a higher 'vocational' content to the curriculum during
the last two years of compulsory schooling. The background to this aspect
is that educational interests had for long opposed vocational training in
schools, and have attempted to keep schooling as basically academic. It is
this view of the objects of education that led to the abolition of the commercial
and technical schools
(1)Prais,
S. J., Vocational qualifications of the labour force in Britain and Germany,
National Institute Economic Review, No. 98, November 1981.
(2)See, for
example, M. P. Fogarty and E. Reid, Differentials for managers
and skilled manual workers in the UK, PSI, 1980.
(3)For some evidence of a similar phenomenon in the USA, see
P. Ryan, The costs of job training for a transferable skill, British Journal
of Industrial Relations, November 1980, 18,3; 334-351.
(4)See, in particular,
Becker, G. S., op. cit. (second edition), pp 94-135.
(5)An unpublished
tabulation from the 1974 New Earnings Survey shows apprentice and other trainee
earnings in manu facturing
industry as 70 per cent of the earnings of non- apprentice etc. workers aged less than 21. This figure
is almost certainly a downward-biased estimate of the true relationship
between apprentice and non-apprentice earnings. Unpublished data provided
by Dr H. Hollenstein indicate that apprentice wages in Switzerland were only
about 30 per cent of the earnings of non-apprentice juvenile workers (i.e.
workers aged 19 or less).
7371
. (which
contrasts with the tremendous expansion of the German Realschulen in the past
two decades). (ii) The introduction of a Youth Training Scheme (YTS) to provide
a full year's 'foundation' training for all 16-year-olds, either on a full-time
basis (if the young person is unemployed) or a part-time basis for young people
in employment (in conjunction with the Unified Vocational Preparation scheme).
The YTS will be introduced in September 1983 when it will replace the current
Youth Opportunities Programme (YOP) (introduced in 1978, in the words of the
White Paper, 'to help the minority of young people who were unemployed and
quite unprepared or ill-equipped for working life by means of a short period
of work experience or work preparation'). The stated objectives of YTS are
more oriented towards systematic training provision than the YOP.(') This
appears as a move towards the German system of obligatory part-time vocational
training for all school-le~.vcrs; but it is only a very first step. (iii)
Measures intended to raise training standards for skilled occupations. The
government will seek to encourage the widespread adoption of training schemes
which make the attainment of tested standards obligatory rather than an optional
requirement for new entrants to skilled occupations. The background here is
that British vocational training is still largely based on `servir~g time',
and contrasts with the requirement to pass trade examinations that are usual
in Germany. For adult trainees, it is also proposed that the existing TOPS
scheme will be increasingly oriented towards the provision of trainees in
occupations for which the demand is rapidly expanding. The MSC will also be
asked to proceed with its earlier proposals for an 'Open Tech'programme outlined
in a Consultative Document earlier in 1981 .(2) The 'Open Tech' is intended
to promote an expansion of adult education at technician and supervisory levels
'by making existing facilities and new courses more accessible through the
use of "open learning" and "distance learning methods" and exploiting
the
potential of new information technology'. (White Paper, para. 50). In addition
to the estimated expenditure of El billion on YTS (compared to E400 million
in 1981/82 on YOP); the White Paper envisages a further £2~0 million will
be spent on TOPS (compared to about E250 million currently) and about £100
million on measures to increase the flow of skilled entrants to the labour
force through apprenticeships and other trainee schemes (compared to about
E85 million currently)(3). The net effect on public expenditure of the replacement
of YOP by YTS will be somewhat less than £600 million. Young people in their
first year after leaving school engaged in YTS programmes will be awarded
a training allowance of £15 per week (compared to the £2S per week paid to
YOP trainees) and there will be a further saving in supplementary benefit
payments in respect of young people who would otherwise have been registered
unemployed.(4) Will the new work? `~ The proposals to increase the vocational
content during the last two years of compulsory schooling echo the intentions
of the 'great debate' on education and industry launched by the previous government; some of the issues were discussed by CPRS two years ago in their report on
Education, training and industrial ~et°,~®r~ac~~~^e.t~% The difficulty with
doing anything in this important area is that the government does not control
curricula, text books or examinations. ?) The new White Paper does not explain
how it proposes to speed up movement in this area. Without further details
its proposals may be described as toothless. In proposing a move towards the
adoption of `certrficated' standards as the basis for entry into skilled occupations
(rather than time-serving), the White Paper seems to suggest that the government
is at last 'pushing on an open door'. But we may be entitled to considerable
scepticism, in view, for example, of the remark in AA to the effect that 'few
addressed these issues in responding to the Consultative
(1)In the
words of the White Paper, the YTS 'will aim to equip unemployed young people
to adapt successfully to the demands of employment, to have a fuller appreciation
of the world of industry, business and technology in which they will be
working; and to develop basic and recognised skills which employers will
require in future'.
(2)MSC,
An open tech programme, May 1981.
(3)No information
is provided in the White Paper on the price base for any of the expenditure
figures quoted: it is therefore impossible to assess to what extent the 'increases'
quoted above represent real increases.
(4)The MSC
estimate that the net cost of Exchequer of the current YOP scheme is about
60 per cent of its gross cost. We would expect the net cost of the YTS to
represent a somewhat higher proportion of gross outlays because of its relatively
higher 'training' input.
(5)CPRS,
Education, training and industrial performance, HMSO, 1980.
(6)As the CPRS
Report explains (op. cit.) 'up to the 1944 Education Act, the Government
had powers to prescribe the curriculum by regulations. However the Secretary
of State for Education and Science has said he does not intend to return
to this position'.
7472
Document'.
(1) Even more significant was the rejection by the trade unions concerned
of a programme (known as 'IP49') based on these principles for the reform
of craft engineering training put forward by the Engineering Industry Training
Board (EI'T~).~v> Central to the EITB package was the proposal that craft
status should be linked to the achievement of defined and tested standards
of both theoretical and practical work. The only direct policy lever identified
in the White Paper for actively influencing outcomes in this respect would
involve the increased channelling of MSC support for apprenticeship and other
training schemes towards programmes which were based on the adoption of appropriate
standards. Currently MSC programmes provide support for about 30-40,000 apprenticeship
places per annum out of a total stock of about 450,000 placcs.c3> There is
no indication in the White Paper that this proportion will be significantly
increased. In principle, the government has more direct levers than this for
influencing the rate of adoption of proposed new standards-notably in its
dealings with a wide range of public sector organisa- tions engaged in training
programmes. The possibility of action along these lines, however, is not invoked
in the White Paper. The nature of the 'skill training' which will be offered
within the YTS does not emerge clearly from the White Paper. Some emphasis
is put on the acquisition of what are called 'basic skills' like 'numeracy
and literacy'; it is also envisaged that trainees will acquire some 'practical
competence in the use of tools and machinery and in some basic office operations'.
Activities of this kind are really making good basic deficiencies in the education
system which, except for a small proportion of 'remedial cases', might be
better remedied by appropriate adjustments to the school curriculum. It is
therefore not clear whether the White Paper's proposals for curriculum reform
might not be covering much the same ground as the training component of YTS.
What is clear is that the level of vocational training proposed for YTS participants
will fa.ll substantially
below
that offered to young people currently engaged in part-time vocational educational
training in Germany or Switzerland. The more obvious impact of YTS will be
on registered unemployment. Its introduction may be likened to a measure such
as an increase in the minimum school leaving age in producing a once-for-
all reduction in the proportion of the population of working age actively
seeking employment and appearing on the unemployment register. However, the
extent to which the scheme reduces unemployment of young persons in their
subsequent first years in the labour force will depend on the extent to which
the potential productivity in employment of YTS graduates is enhanced by their
participation in the scheme, and brought closer to the current level of wages
for 17-year-olds. It must be remembered that, in many industries, agreements
between employers and trade unions lead to adult wages being paid at eighteen.
And under the new arrangements an 18-year-old will have had less work experience
than previously. Will his loss of work experience be more than compensated
by the added training? That remains to be seen, but we cannot unfortunately
rule out the possibility that employment difhcultics may be increased. As
a device for reducing unemployment YTS should properly be compared in cost-
effectiveness terms with measures such as the Young Workers Scheme, (4) which
acts directly on the cost of employing young people and which, by providing
beneficiaries with the opportunity of some on-the-job experience, may also
improve their employment prospects beyond the age of eighteen. The wording
of paragraph 58 of the White Paper(5) perhaps invites us to think that in
its initial stages, the costs of YTS will not be met by increases in either
general taxation or more specific levies on employers. However, the net impact
of YTS on the level of employment is uncertain in the absence of a clear-cut
statement on the funding of the scheme. Summary and conclusions The White
Paper is the latest in a long line of official documents lamenting the persistent
failure of the UK training system 'to produce the numbers of skilled people
required by a modern competitive economy' (White Paper, para. 61). Notwithstanding
its title, however, the White Paper's proposals for improving both the quantity
and the quality of skilled
(1)Paragraph
20 of AA states that, 'Few addressed these issues in responding to the Consultative
Document. Perhaps this was because there is already a large number of experienced
standard-setting bodies. But it is quite clear that while the range of educational
standards has been developed for a broad spectrum of jobs, far less has been
done to develop standards of practical competence and associated
terminal tests. In too many occupations it is the form of the training
and the level of terminal achievement which determines access to jobs. Also
standards and syllabuses are in constant need of review because of technological
and market changes' (our italics).
(2)Review
of Craft Apprenticeship in Engineering, known as the Information Paper
49 (IP 49) proposals, Engineering Industry Training Board, 3.78.
(3)A figure
of 463,000 apprenticeship places in 1974 is given in Outlook on Training,
op. cit.
(4)The Young
Workers Scheme (YWS) started on 4 January 1982. The main provision is that
employers can claim £15 a week for 12 months in respect of each employee
under 18 whose gross earnings are below £40 a week.
(5)Paragraph
58 of the White Paper states that, 'For the immediate future the Government
sees an increase of public expenditure on this scale as the only way of plugging
the gap in the training provision required...'
7573
manpower
are both liznited in scope and of uncertain effectiveness. Indeed, a major
element of the White Paper measures (the YTS) seems likely to have its impact
primarily on the immediate level of registered unemployment rather than on
the quality or quantity of training required by new entrants and existing
members of the labour force. The White Paper admits in its final paragraph
that `not all the questions (concerning the development of training) are resolved',
and fortunately further investigation is promised. The appraisal of alternative
approaches which follows is intended as an initial contribution to that discussion.
(a) schooling The White Paper recognises that training has a 'schooling' as
well as a post-schooling dimension, and its endorsement of the need for curriculum
changes and for strengthening the links between education and the world of
work is entirely welcome. As we have remarked earlier, curriculum changes
which would ensure that the school system provides a training in 'basic skills'
would allow a subsequent increase in the skill-content of the YTS (or any
successor scheme). However, decision-making in matters of curriculum design
still remains a jealously guarded vested prerogative. The White Paper does
not indicate how the desirable objectives are to be achieved; the educational
establishment in the past has shown itself reluctant to move in this direction.
Perhaps the time has come to consider tying payment of a proportion of central
government financial support to local authorities to the achievement of a
specified vocational content in the curriculum of secondary schools. Two other
proposals worth consideration would be the encouragement of distinct technical
and commercial streams in the comprehensive system (providing the same services
as the previous technical and commercial schools, but on a larger scale).
Pursuit of this objective would also require an element of financial inducement
to local authorities. Also worth considering would be a reduction in the full-time
school leaving age to 15, provided that it was compensated by compulsory part-time
schooling thereafter, either by way of day-release or block- release. (b)
Wage levels of trainees We have argued that it is market imperfection, in
the form of a level of training wages in excess of the market-clearing level,
which should be regarded as the most important factor in the inadequate quantity
and quality of post-school training in the UK. As we have seen, trainee wages
(as a fraction of adult wages) in this country are 2-3 times those in Germany
and
Switzerland which, like the UK, rely upon apprenticeship schemes as the primary
entrance gate to skilled occupations, and in which such training is more universal.
The starting point for any assessment of policy options for improving matters
here then depends on whether or not this 'imperfection' is taken as constituting
an insurmountable barrier. The level of trainee (and other juvenile) wages
is the outcome of agreements reached between employers and trade unions, and
therefore may be taken to reflect the balance of perceptions of the parties
concerned of their own advantages. Perceptions of this kind may be mistaken,
and in any event are slow to change; in the short to medium term, it is thus
probably realistic to base policy on a continuation of existing pay relativities.
Nevertheless, it may be possible to devise measures which alter the pressures
and incentives acting on the parties concerned so that the bargain struck
may more closely reflect the 'competitive' outcome. The YWS device of making
subsidy payments conditional on the employee receiving a rate somewhat below
that set in collective agreements may be considered as a first step in this
direction. But much further thought needs to be given to both long-term and
short-term solutions. Whilst the source of the UK's current deficiency in
general training may be mainly on the side of the demand (by firms) for trainees,
a significant reduction in trainee remuneration could lead to the emergence
of a deficiency in the supply of trainees given the relatively low differentials
enjoyed by skilled workers in the UK. (c) Standards and incentives If the
level of trainee wages is too high to permit an adequate investment in general
or transferable skill training, then the employer could be subsidised. Initial
payment of subsidy would be conditional on the trainee taking an approved
set of off-the-job general training courses, and the continuation of payment
could depend on the trainee passing external tests. An approach of this kind
would have the advantage of supporting both quantity and quality objectives,
since the nature of the approved courses could be specified by the subsidising
agency, and should include provision for external examination of both theoretical
and practical skills. (In the recent past there has been a tendency to eliminate
practical tests, and to remove the external element from all examinations; these tendencies inhibit the transfer of skills and need to be reversed.)
Apart from affecting the content of training for traditional apprenticeship
occupations, this scheme could be used to extend greatly the range of occupations,
initial training for which included a significant ofF the ~ob element. In
this respect it would move the training system closer to
7674
that
currently observed in Germany, for example, where training courses are offered
for a much wider range of occupations than in the UK. This approach would
leave decisions on the allocation of training resources between occupations
in the hands of firms and individuals. However, much of the off-the-job training
would be provided through the public further education system; and an increase
in the demand for training places resulting from the subsidy programme would
then have secondary public expenditure effects through the education budget.
An alternative approach to the subsidisation of trainee places in industry
(with day-release or its equivalent) would be the extension (or 'deepening')
of YTS to provide full-time vocational education with opportunities for trainees
to take relevant externally examined courses (again covering both theoretical
and practical skills). An emphasis on the provision of training facilities
for a wide range of
skilled
occupations within the full-time vocational education system characterises
practice in certain continental European countries such as France. (1) Such
a scheme would also operate on both the quantity and quality objectives and
could extend the coverage of training particularly in transferable skills.
By comparison with a subsidy-based scheme which is based on the employer,
it might be somewhat less demand-responsive in the provision of training capacity,
and might also involve greater mismatch between the skill mix demanded by
employers and that supplied by the training system. Introduction of a scheme
of this kind would also involve difficult issues of compulsion and universality.
(1)See,
for example, European Centre for the Development of Vocational Training (CEDEFOP),
Relationships between education and employment and their impact on
education and labour market policies (1981).</meta-value> </custom-meta></custom-meta-wrap></article-meta></front><back><notes><p>(1) <italic>A new training initiative: a programme for action, Cmnd</italic> 8455, December 1981.</p><p>(2) <italic>Outlook on training; review of the employment and training
act 1973,</italic> MSC, July 1980.</p><p>(3) See Pigou, A. C., <italic>The economics of welfare,</italic> 4th edition, Macmillan, 1932.</p><p>(4) G. S. Becker, <italic> Human capital,</italic> (first edition 1964, second edition 1975) NBER; see also K. Hartley, Training and retraining in industry, in <italic>Fiscal policy and labour supply</italic> (Report of a Conference), Institute of Fiscal Studies, 1977.</p><p>(1) Department of Employment, <italic>Employment Gazette,</italic> January 1981. The evidence formed the basis of a written Parliamentary answer by the Under Secretary at the Depart ment of Employment, Mr Peter Morrison, on 13 July 1981.</p><p>(2) IDS, <italic> Apprentices' pay,</italic> Study 198, July 1979; <italic>Young
workers' pay,</italic> Study 294, November 1981.</p><p>(3) Information from Department of Employment, <italic>New
earnings survey,</italic> 1980 Part D, Analyses by Occupation and Department of Employment, <italic>Time rates of wages and hours
of work,</italic> April 1980, both London, HMSO, 1980.</p><p>(4) OECD, <italic> Youth without work,</italic> a report by Shirley Williams and other experts, OECD, Paris, 1981.</p><p>(5) It is also pointed out in <italic>Youth without work</italic> (<italic>op. cit.,</italic> p.112) that in addition to the allowances paid by employers, young people in need can receive assistance under the Employ ment Protection Act. The rates set depend on the age of the trainee, whether he or she is living at home or elsewhere, and on the training institution. The aim is to encourage young people to prefer training to unskilled work.</p><p>(6) Unpublished tabulations kindly provided by Dr H. Hollenstein of the Economic Research Centre, Swiss Federal Institute of Technology.</p><p>(1) Prais, S. J., Vocational qualifications of the labour force in Britain and Germany, <italic> National Institute Economic Review,</italic> No. 98, November 1981.</p><p>(2) See, for example, M. P. Fogarty and E. Reid, <italic>Differentials
for managers and skilled manual workers in the UK,</italic> PSI, 1980.</p><p>(3) For some evidence of a similar phenomenon in the USA, see P. Ryan, The costs of job training for a transferable skill, <italic>British Journal of Industrial Relations,</italic> November 1980, 18,3; 334-351.</p><p>(4) See, in particular, Becker, G. S., <italic>op. cit.</italic> (second edition), pp 94-135.</p><p>(5) An unpublished tabulation from the 1974 New Earnings Survey shows apprentice and other trainee earnings in manu facturing industry as 70 per cent of the earnings of non- apprentice etc. workers aged less than 21. This figure is almost certainly a downward-biased estimate of the true relationship between apprentice and non-apprentice earnings. Unpublished data provided by Dr H. Hollenstein indicate that apprentice wages in Switzerland were only about 30 per cent of the earnings of non-apprentice juvenile workers (i.e. workers aged 19 or less).</p><p>(1) In the words of the White Paper, the YTS 'will aim to equip unemployed young people to adapt successfully to the demands of employment, to have a fuller appreciation of the world of industry, business and technology in which they will be working; and to develop basic and recognised skills which employers will require in future'.</p><p>(2) MSC, <italic> An open tech programme,</italic> May 1981.</p><p>(3) No information is provided in the White Paper on the price base for any of the expenditure figures quoted: it is therefore impossible to assess to what extent the 'increases' quoted above represent real increases.</p><p>(4) The MSC estimate that the net cost of Exchequer of the current YOP scheme is about 60 per cent of its gross cost. We would expect the net cost of the YTS to represent a somewhat higher proportion of gross outlays because of its relatively higher 'training' input.</p><p>(5) CPRS, <italic> Education, training and industrial performance,</italic> HMSO, 1980.</p><p>(6) As the CPRS Report explains (<italic>op. cit.</italic>) 'up to the 1944 Education Act, the Government had powers to prescribe the curriculum by regulations. However the Secretary of State for Education and Science has said he does not intend to return to this position'.</p><p>(1) Paragraph 20 of AA states that, 'Few addressed these issues in responding to the Consultative Document. Perhaps this was because there is already a large number of experienced standard-setting bodies. But it is quite clear that while the range of educational standards has been developed for a broad spectrum of jobs, far less has been done to develop standards of <italic>practical competence</italic> and <italic>associated terminal tests.</italic> In too many occupations it is the form of the training and the level of terminal achievement which determines access to jobs. Also standards and syllabuses are in constant need of review because of technological and market changes' (our italics).</p><p>(2) <italic>Review of Craft Apprenticeship in Engineering,</italic> known as the Information Paper 49 (IP 49) proposals, Engineering Industry Training Board, 3.78.</p><p>(3) A figure of 463,000 apprenticeship places in 1974 is given in <italic>Outlook on Training, op. cit.</italic></p><p>(4) The Young Workers Scheme (YWS) started on 4 January 1982. The main provision is that employers can claim £15 a week for 12 months in respect of each employee under 18 whose gross earnings are below £40 a week.</p><p>(5) Paragraph 58 of the White Paper states that, 'For the immediate future the Government sees an increase of public expenditure on this scale as the only way of plugging the gap in the training provision required...'</p><p>(1) See, for example, European Centre for the Development of Vocational Training (CEDEFOP), <italic> Relationships between
education and employment and their impact on education and
labour market policies</italic> (1981).</p></notes></back></article></istex:document></istex:metadataXml><mods version="3.6"><titleInfo lang="en"><title>The New Training Initiative—an Evaluation</title></titleInfo><titleInfo type="alternative" lang="en" contentType="CDATA"><title>The New Training Initiative—an Evaluation</title></titleInfo><typeOfResource>text</typeOfResource><genre type="research-article" displayLabel="research-article" authority="ISTEX" authorityURI="https://content-type.data.istex.fr" valueURI="https://content-type.data.istex.fr/ark:/67375/XTP-1JC4F85T-7">research-article</genre><originInfo><publisher>Sage Publications</publisher><place><placeTerm type="text">Sage CA: Thousand Oaks, CA</placeTerm></place><dateIssued encoding="w3cdtf">1982-02</dateIssued><copyrightDate encoding="w3cdtf">1982</copyrightDate></originInfo><language><languageTerm type="code" authority="iso639-2b">eng</languageTerm><languageTerm type="code" authority="rfc3066">en</languageTerm></language><relatedItem type="host"><titleInfo><title>National Institute economic review</title></titleInfo><genre type="journal" authority="ISTEX" authorityURI="https://publication-type.data.istex.fr" valueURI="https://publication-type.data.istex.fr/ark:/67375/JMC-0GLKJH51-B">journal</genre><identifier type="ISSN">0027-9501</identifier><identifier type="eISSN">1741-3036</identifier><identifier type="PublisherID">NER</identifier><identifier type="PublisherID-hwp">spner</identifier><part><date>1982</date><detail type="volume"><caption>vol.</caption><number>99</number></detail><detail type="issue"><caption>no.</caption><number>1</number></detail><extent unit="pages"><start>68</start><end>74</end></extent></part></relatedItem><identifier type="istex">3B8FB4918C1A5FCC19FBC4F2C7F622085D0A2AE7</identifier><identifier type="ark">ark:/67375/M70-0XJZQGKP-Q</identifier><identifier type="DOI">10.1177/002795018209900106</identifier><identifier type="ArticleID">10.1177_002795018209900106</identifier><recordInfo><recordContentSource authority="ISTEX" authorityURI="https://loaded-corpus.data.istex.fr" valueURI="https://loaded-corpus.data.istex.fr/ark:/67375/XBH-0J1N7DQT-B">sage</recordContentSource></recordInfo></mods><json:item><extension>json</extension><original>false</original><mimetype>application/json</mimetype><uri>https://api.istex.fr/document/3B8FB4918C1A5FCC19FBC4F2C7F622085D0A2AE7/metadata/json</uri></json:item></metadata><author></author><serie></serie></istex></record>Pour manipuler ce document sous Unix (Dilib)
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