# Strengthening human capital

## **Subsidizing skills training, and addressing skills-information asymmetries, is a common strategy for**

**increasing workers’ employability, but requires careful design** . With the right training methods, adults and mature workers can learn new skills to good effect.<sup>133</sup> Tailoring programs to serve the needs of older workers will be essential. First, the design of training interventions needs to consider training modalities (see below), motivation among individuals and employers for taking up training offers, and the need to build capacity in the training sector.<sup>134</sup> Second, the deadweight and substitution losses associated with training can be high<sup>135</sup> and, on average, many training programs fail to have any impact. However, results vary tremendously, and impacts can grow over time, suggesting that design and targeting are key.<sup>136</sup>

**Training that is not adapted to older workers’ needs could reduce the value of training** . Some studies have found that the training of older workers has lower impacts on key dimensions such as learning, career development, earnings, or job security, and that older employees can be less ambitious in their training participation.<sup>137</sup> The generally low uptake of adult training programs is at least partial evidence that many current programs do not fulfill needs. A likely reason is that many training programs are not adapted to older workers’ capabilities and learning styles: notably, they do not provide informal and self-paced learning and work-integrated approaches or make use of older workers’ cognitive strengths, such as the capacity to direct and act on information received.<sup>138</sup> In countries with high informality, training programs that do not factor in the opportunity cost of attending training for workers’ earnings are likely to be less effective, as are programs that fail to acknowledge how high-stress life circumstances may affect workers’ mental capabilities.<sup>139</sup>

**Countries are using different instruments to increase individual access to, and incentives for, lifelong learning, including voucher schemes and training subsidies.** With individual learning schemes (including vouchers, individual learning accounts, and training savings accounts), individuals choose their own options for skills development. To deliver higher skills accumulation, these accounts need to be embedded in a broader framework addressing other skills constraints, including the availability of high-quality and relevant training opportunities, information and guidance services, paid training leave, and skills recognition frameworks.<sup>140</sup> Voucher-based systems can help stimulate training, especially for workers in non-traditional or less stable forms of employment. Voucher systems have had mixed success, however, especially for hard-to-serve groups such as low-skilled workers. Experience shows that simple design, adequate and predictable funding, effective information and guidance, and a focus on supporting high-quality training matter significantly.<sup>141</sup> Specific outreach efforts are needed to target low-skill groups, as well as employers, and encourage them to co-invest in skills development.<sup>142</sup> For example, an information campaign on a training program in Germany

133 Knowland and Thomas 2014. 134 Glick et al. 2015. 135 McKenzie 2017a. 136 Card et al. 2018. 137 Zwick 2011. 138 Picchio 2021, Thomas et al. 2020, Knowland and Thomas 2014. 139 Saraf et al. 2018. 140 European Union Council 2022 and OECD 2019d. 141 OECD 2019c. 142 OECD 2019c, Vodopivec et al. 2019.

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