Policies

Promote well-designed financing arrangements for adult education and training

Given the disproportionately lower rates of participation in adult learning by disadvantaged groups, older workers, and small firms, governments might need to set up incentives, such as a range of financial arrangements, as a way to overcome typical barriers to adult learning take-up. Funding mechanisms that co-finance adult learning expenses by firms and adults, or that allow individuals to have greater choice of learning opportunities can raise the efficiency of provision.

Co-financing instruments available to firms include profit tax deductions and levy/grant schemes. For individuals, options such as individual learning accounts (ILAs) and subsidies (vouchers and allowances) can facilitate learning among low-skilled adults. Other strategies may include co-financing where firms and individuals share the cost of training, the pooling of resources among firms (e.g. in vertically linked firm networks where large enterprises provide training directly to small ones belonging to the supply chain), and the provision of support for individuals during training leave. The challenge for the efficient use of public funds is to find solutions that target individuals who truly present financial constraints to training and to avoid subsidizing participation of those who would have undertaken training anyways at their own expense (the so-called deadweight effect).