Training or not: what is at stake during an economic downturn?

Abstract

This article discusses training decisions and the economy-wide consequences of training provision, particularly during an economic downturn. This approach considers as key elements, the wage gap and the probability of employability gap pre- and post training, taking the gains from these two elements as the key to the decision to undertake training. As public training provision may not be attractive enough for unskilled workers because of the limited benefits reported to potential trainees, this article also discusses the role of training for development, providing a novel approach to assess its value. As it may speed the development process by the abatement of key adjustment parameters, also with favorable impact on wage disparity, it is argued that these effects reveal the true value of easing mobility. Thus the analysis highlights the relevance of improving training attractiveness and effectiveness.