Abstract
Examining the conceptual basis under which training occurs in industry involves the consideration of who gains from such training and who pays, as well as the conditions that ensure an optimal quantity and structure of training. The analysis of these factors then provides a rationale (or several rationales) for social intervention in the occupational training process as provided by private sector firms. This examination also attempts to quantify the nature and extent of training in industry and the level and distribution of the costs of such training. The following conclusions can be anticipated:
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There are a variety of conditions under which it is socially justified for government to influence the extent and nature of occupational training in industry.
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The existing evidence does not tell us and is not likely to tell us in the near future the optimal nature or extent of social intervention in the process of occupational training in the private sector of industry.
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Even the nature, level, and composition of training in private industry, as well as its costs, are not well documented or clearly understood. To suggest that the relevant descriptive data, much less data that would allow careful structural analysis, are fragmentary is a major understatement. But, of course, an appropriate intervention strategy ultimately must be based on the evidence of sound information.
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Notes
Ralph K. Scott, “Management’s Dilemma: To Train or Not to Train People,” Training and Development Journal 32, no. 2 (February 1978).
Thomas F. Gilbert, “Training: The $100 Billion Opportunity,” Training and Development Journal 30, no. 11 (November 1976).
Seymour Lusterman, Education in Industry (New York: Conference Board, 1977).
Jacob Mincer, “On-the-Job Training: Costs, Returns and Some Implications,” Journal of Political Economy 70, no. 5, Part 2, Supplement (October 1962). A rough estimate of the total money value of wage income was made by subtracting interest paid and transfers from disposable personal income
see Economic Report of the President (: Gov’t. Printing Office, January 1979), p. 192, Table B-8. Two main reasons that this ratio could be underestimated are that the Mincer estimate itself may underestimate forgone earnings due to on-the-job training and that the structure of the economy most surely has changed since 1958. If the economy has become characterized by a more highly skilled labor force, the proportion of on-the-job training likely will have increased over time, since higher levels of formal training and skill result in increased on-the-job training.
Lester C. Thurow, (Belmont, Calif.: Wadsworth Publishing, 1970)
Gary S. Becker, “Investment in On-the-Job Training,” in Mark Blaug, ed., Economics of Education 1 (Baltimore: Penguin Books, 1968), originally published in Becker, Human Capital (New York: Columbia University Press, 1964), Chap. 2 Sherwin Rosen, “Learning and Experience in the Labor Market,” Journal of Human Resources 7, no. 3 (Summer 1972) and Sherwin Rosen, “Learning by Experience as Joint Production,” Quarterly Journal of Economics 86, no. 3 (1972).
Thurow, Investment in Human Capital.
Mincer, “On-the-Job Training.”
Rosen, “Learning and Experience in the Labor Market.”
Thurow, Investment in Human Capital, p. 96.
Thurow, Investment in Human Capital.
Ibid.
Lusterman, Education in Industry, p. 1.
R.S. Eckaus, “Comments on Becker’s Analysis of On-the-Job Training,” in Blaug, Economics of Eduction I, originally published in Journal of Political Economy 71, no. 3 (1963).
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© 1981 Peter B. Doeringer
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Stromsdorfer, E.W. (1981). Training in Industry. In: Doeringer, P.B. (eds) Workplace Perspectives on Education and Training. Boston Studies in Applied Economics, vol 1. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-8144-7_3
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DOI: https://doi.org/10.1007/978-94-009-8144-7_3
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