NCPA - National Center for Policy Analysis

Scant Evidence Government Job-Training Programs Work

January 10, 1996

In the vast literature on government-funded public education programs there is little evidence that additional funds to teach basic work-related skills would actually result in improvement.

  • Over the past 20 years, the average real wages of those with little education has declined, while college graduates have seen actual gains.
  • Scores of studies have shown that despite huge growth in public spending for schools, student performance in basic math and language skills has declined since the 1970s.
  • In fact the decline in the growth of labor productivity that began in the early 1970s is closely associated with declining student performance.

A recent study of public employment programs in 17 industrialized countries revealed that each additional percentage point of gross domestic product devoted to these programs was associated with a 1.3 percentage point increase in the unemployment rate.

Researchers asked why this was happening and came up with three fundamental reasons:

  • Taxes and borrowing that finance government programs tend to crowd out funds for private employment initiatives.
  • Government programs are not adequately driven by changing market conditions to precisely meet needs of employers.
  • Public initiatives tend to be inefficient since government lacks the discipline imposed by markets and competition.

The most effective training is for students to acquire basic skills in schools, augmented by formal on-the-job training or informal practical training.

Source: Richard Vetter (Center for the Study of American Business, Washington University in St. Louis), "Why Government Job Training Fails," Investor's Business Daily, January 10, 1996.

 

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