Subsidies and Levies as Policy Instruments to Encourage Employer-Provided Training

This paper provides an overview of the available information concerning selected policy instrumentsintended to promote employer-provided training, including the stated rationale and objectives, the targetgroups and operational design as well as a at a summary of the evaluative evidence regarding theiroperation. The analysis focuses on policy instruments providing financial assistance or incentives,specifically, subsidies (including tax incentives and grants) and levy schemes that devote a least someshare of their resources to continuing training. Training leave regulations are considered only to the extentthat they can be treated as a form of subsidy or a levy scheme, depending on the main financingmechanism involved. Instruments that focus solely on improving the quality of training or enhancingtransparency in the training market are not addressed. In addition to offering a description of differentinstruments, the paper discusses the strengths and weaknesses (or risks and opportunities, respectively) ofdifferent types of instrument or particular elements of instrument design. It also specifies principles ofsuccessful instrument design that have been put forth in the literature and concludes with some remarksregarding the choice of policies.