FS I 92 - 3
Further Education and Training for the Employed
(FETE): European Diversity.
A description or country models and an analysis of European Labour Force Survey Data
Peter Auer
Juni 1992
ISSN Nr. 1011-9523
Report prepared for the Commission of the European Communities (DG V)
(with the collaboration of: N. Anker, T. Crosbie L. Forlani, R. Goldin, H. Hocker, L. Linke,
N. Meager, K. Morgan, K. Reinsch, E. Serfaty)
Forschungsschwerpunkt
Arbeitsmarkt und
Beschaftigung (FS 1)
Research Area Labour Market and
Employment
Labour Market and Employment Reichpietscbufer SO
1000 Berlin 30
sten Politikfeider bei der Anpassungvon Betrieben und Arbeitnehmern an den strukturellen Wandel. Durch Weiterbildung konnen okonomische (mehr Effizienz) mit sozialen (Erhalt des Arbeitsplatzes, Vermeidung von Arbeitslosigkeit) Aspekten verbunden werden. Griinde fiir einen Bedeu- tungszuwachses dieser "vierten Saule" des Bildungssystems liegen einer- seits in der technologischen und arbeitsorganisatorischen und anderer- seits in der demographischen Entwicklung. Wahrend erstere die qualifika- torischen Anforderungen generell erhoht, fuhrt die demographische Ent wicklung, gemeinsam mit einer Praferenz Jugendlicher fiir hohere Bil- dung, zu einem geringeren (und spateren) Arbeitsmarkteintritt Jugendli cher und zu einer Einschrankung der Mdglichkeiten, Qualifikationen durch eine Neueinstellung Jugendlicher zu erzeugen. Damit werden die Qualifizierungsanstrengungen ftir die bereits Beschaftigten tendenziell verstarkt. Berufliche Weiterbildung wird heute auch als Teil eines
"Paketes" der Entwicklung der Humanressourcen aufgefaBt, das die Ent wicklung der Arbeitsorganisation, der neuen Technologien und sogar der
internen und externen Verwaltungsstrukturen der Unternehmen (z.B. die Dezentralisierungstendenzen, die in Gewinn- oder Kostenzentren sichtbar werden) umfaBt. Die heutige "flexible" Produktion von Giitern und Dienstleistungen verlangt nach mehr Anpassungsbereitschaft und Weiter bildung als die friihere "tayloristisch/fordistische" Arbeits- und Unternehmensorganisation.
Obwohl es ein quasi generelles Einverstandnis dariiber gibt, daB die Humanressourcen entwickelt werden mtissen, gibt es erhebliche Differen- zen fiber die dazu notwendigen Mittel und Wege und fiber die Frage, wer die Kosten ffir diese Entwicklung fibernehmen sollte. Weiterbildung, so ein verbreitetes Argument, sollte nicht mehr nur als ein Kostenfaktor be- trachtet werden, sondern als eine Investition. Dabei unterscheidet sich diese Investition von Kapitalinvestitionen dadurch, daB sie "Beine" hat
und der Arbeitskraft gehort, die dariiber prinzipiell frei entscheiden kann.
Fiir Unternehmen, die weiterbilden, gibt es daher das Problem des
"Wilderns (poaching)", d.h. die Abwerbung ausgebildeter Arbeitnehmer
durch Firmen, die selbst nicht weiterbilden und dadurch einen Investiti-
onsverlust fiir die weiterbildungsaktiven Firmen. Durch dieses Problem kann es zu einer generellen Unterinvestition in Weiterbildung kommen.
Bin weiteres, starker sozialpolitisch relevantes Problem ist die geringe Beteiligung der Un- und Angelernten an beruflicher Weiterbildung. Sieht man die staatliche (aber auch die tarifliche) Politik unter diesen Ge- sichtspunkten, so zeigt sich, dafi es in den hier ausgewahlten Landern un- terschiedliche Ansatze gibt, um diese Probleme zu Idsen und dafi diese Ansatze mit der "Makroorganisation" des Systems der beruflichen Bildung zusammenhangen.
Das vorliegende Projekt untersucht diese "Makroorganisation" der be ruflichen Weiterbildung fur Beschaftigte in einigen ausgewahlten euro- paischen Landern (Bundesrepublik, Danemark, Frankreich, GroBbritan- nien und Italien) und versucht, die wichtigsten Organisationskriterien die- ser Systeme zu erfassen. Gefragt wird dann nach dem Zusammenhang zwischen der "Makroorganisation" und der Beteiligung an beruflicher Weiterbildung, wobei hier erstmals die Zahlen Uber die Bildungsbeteili- gung Beschaftigter der "Europaischen Arbeitskraftestichprobe" herange- zogen werden.
Die Zahlen uber die Beteiligung an beruflicher Bildung werden auch mit einigen makrookonomischen Daten Uber Wirtschaftswachstum, Pro- duktivitatswachstum und Beschaftigung in Zusammenhang gesetzt. Dabei zeigt sich, daB die von vielen Autoren vermuteten Zusammenhange (mehr Weiterbildung fuhrt zu hoherer Produktivitat, hoherem Wirtschaftswachs tum) auf diesem Aggregationsniveau und mit unserem Datenmaterial in der Periode 1983-89 nicht nachgewiesen werden konnen. Der einzige si- gnifikante Zusammenhang ergibt sich zwischen der wachsenden Beteili gung an Weiterbildung und dem Wachstum der BeschUftigung. Dieses un- erwartete Resultat der Analyse, die in anderen, weniger aggregierten Analysen weitergefuhrt werden sollte, wird im vorliegenden Bericht ein- gehender diskutiert.
Um einen Einblick in die Weiterbildungsstrategien von Firmen zu er- halten und die regionalen Aspekte zu diskutieren, sind Ergebnisse von in
einigen Landern durchgefiihrten Faiistudien in der Anlage zur Studie zu-
sammengefafit wiedergegeben.Hauptergebnisse der Studie sind:
1. Die Finanzierung der Weiterbildung (vor ailem durch offentliche Hand, Unternehmen und Arbeitnehmer) ist in den untersuchten Lan dern unterschiedlich organisiert. Gemeinsam ist alien Landern -auBer Danemark- daB ein GroBteil der Kosten von den Firmen selbst getra- gen wird. Die direkte offentliche Beteiligung an der Finanzierung ist eher marginal, es gibt jedoch eine Reihe von Anreizen, Abgaben oder/und offentlichen Bildungsinstitutionen, die die berufliche Wei terbildung unterstutzen und dieses heterogene Feld strukturieren.
Eine Reihung von Landern, die sich an einer Skala von "freiem Markt"
bis "(staatlich) reguliert" orientiert, sahe folgendermaBen aus: GroB- britannien, Italien, Bundesrepublik, Frankreich und Danemark, wobei die Form der Regulierung (vor allem zwischen Staat und Sozialpart- nern) erheblich variiert.
2. Nach den Zahlen der europaischen Arbeitskraftestichprobe ist die re lative Zahl der Teilnehmer an beruflicher Weiterbildung (bezogen auf die Beschaftigten) in Danemark am hochsten. In Reihenfolge kommen sodann GroBbritannien, Bundesrepublik, Frankreich und als SchluB- licht Italien. Diese Zahlen miissen jedoch mit Vorsicht interpretiert werden, da sie auf unterschiedlichen Definitionen basieren. Andere Quellen zeigen eine ahnliche Teilnahmequote fur die Bundesrepublik, Frankreich und GroBbritannien. Alle Zahlen bestatigen die groBe Zahl der Teilnehmer in Danemark und die geringe in Italien.
3. Allerdings sind quantitative Reihungen allein nicht aussagekraftig, sondern sie mtissen durch qualitative Indikatoren "bereinigt" werden.
Beispielsweise muB in GroBbritannien durch Weiterbildung z.T. auch die liickenhafte berufliche Grundausbildung kompensiert werden.
wahrend sie in der Bundesrepublik auf dem "duaien" System der beruf- lichen Erstausbildung aufbauen kann.
4. In alien Landern variieren die Teilnahmequoten an beruflicher Wei-
terbildung nach vorangegangenem BildungsabschiuB und der Stellung im Beruf, aber auch nach Branchenzugehdrigkeit und BetriebsgroBe.
Das Grundmuster ist: je hoher die Bildung und je besser der berufliche Status, desto groBer die Teilnahmechancen an beruflicher Weiterbil- dung. Doch ist die Teilnahme in kleinen Firmen (und in Branchen, die oftmals viele Kleinfirmen aufweisen, wie etwa das Baugewerbe) im Schnitt geringer. Das kann dazu fiihren, daB Branchen- und Betriebs- groBenmerkmale die Teilnahmechancen starker beeinflussen als indi-
viduelle Merkmale: So erhalt ein Arbeiter in der franzdsischen Stahl-
industrie dreimal soviel Weiterbildung wie ein Ingenieur im Bauge werbe. Trotz dieses generellen Musters sind die Teilnahmequoten un- und angelernter Arbeiter und Angestellter beispielsweise in Dane- mark, aber auch in GroBbritannien, hdher als in der Bundesrepublik.
5. Die Analyse des Zusammenhangs der VerUnderung von Teilnahme quoten und Wachstum der Wirtschaft, der Produktivitat und der Be- schaftigung in alien EG-Landern fiir den Zeitraum 1983 - 1989 zeigt unerwartete Resultate: einen leicht negativen Zusammenhang mit Produktivitat und keinen Zusammenhang mit Wachstum, aber einen positiven Zusammenhang zwischen Beschaftigungswachstum und Wachstum der Weiterbildungsquote. Dies bedeutet, daB die Weiter- bildungschancen stark von der Beschaftigungslage und -dynamik (also von Nachfragefaktoren) abhdngen. Diese Analyse muB jedoch mit Zahlen auf niedrigerer Aggregationsebene weitergefuhrt werden.
6. Beziiglich der Verwendung offentlicher Mittel fiir die Weiterbildung (z. B. aktive bzw. passive Nutzer) zeigen die Fallstudien verschiedene Typen von Firmen. Generell haben dffentliche Weiterbildungspro- gramme ein schlechtes "Image", denn sie werden oftmals mit dem Wunsch des Staates (der Region) nach Forderung benachteiligter Zielgruppen und nicht mit der Unterstiitzung der Firmen etwa bei ei- ner effizienzsteigernden Rationalisierung gleichgesetzt. Allerdings hangt dies auch von der VerfaBtheit der Programme ab. Firmen greifen
Die Evaluation der "Weiterbildungsinvestitionen" befindet sich noch in einem Anfangsstadium. Meist evaluieren nur groBe Firmen ihre Bil- dungsanstrengungen und auch dann meist nur mit "weichen" Instru- menten wie Erhebungen iiber die Art des Kurses und des Lehrperso- nals, Priifungen, Bewertungen der Lehrbeauftragten durch die
"Schuler" (oder umgekehrt), weniger jedoch mit Kosten/Nutzen-Be- rechnungen oder anderen Evaiuationstechniken, die den Beitrag der Weiterbiidung am Geschaftserfolg messen. Trotz der Forderung, Wei- terbildung analog zum Betriebskapital nicht als reinen Kostenfaktor, sondern als Investition zu verstehen, fehlen die steuerlichen Voraus-
setzungen (etwa in Form einer moglichen Abschreibung von Bildungs- aufwendungen) fiir eine solche Betrachtung.
Summary
Continuous Vocational Education and Training for people already in work is seen today as one of the most effective ways of coping with structural change, one which can both enhance economic efficiency and promote equity on the labour market. Social and economic developments underpinning such statements are the increasing diffusion and speed of new technology and the demographic development which shifts attention from the provision of qualification through entry to the skill enhancement of the already employed. But training is only one element of the effort to develop human resources: in dynamic firms it is integrated into the firm's product and production strategies and is intimately associated with changes in technology, work organization, organization of supplier networks and changes in corporate structures. Today's more flexible "post- fordist" production organization, producing a wider variety of products and services in smaller batches, is more training-intensive than outdated (but still existing) fordist mass-production.
While it is generally agreed that human resources have to be developed, opinions differ markedly about the ways in which this should be done and who should bear the costs. Training, it is argued, has to be seen today more as an investment, than a simple cost. But this kind of investment is different from capital investment as it is "portable" and
"belongs" to the individual worker who can freely dispose of his or her investment. For individual employers which do train their workforce this bears the risk of losing investment to firms which do not train ("poachers"), leading in the longer term to an underinvestment in training, as even willing employers will refrain from training if their costs are higher than their returns. If return on costs is assured, which could for example be done by setting public incentives for firms which train and taxing firms which do not, by introducing co-investment and by public provision of training, such underinvestment can be avoided. Another problem, which is of concern for policy intervention, is the unequal acces of different groups to training. Countries cope with these problems in different ways and within the framework of the "macroorganisation" of their training systems.
The project looks therefore at the empirical reality of the societal organisation of Further Education and Training for the Employed (FETE) in selected European countries (Denmark, France, Germany, Italy and the United Kingdom), in an attempt to grasp outstanding features of different country "models" and the ways they deal with these problems. In a second part, statistics on training collected by the European Labour Force Survey (ELFS) are analysed and the results compared to data from national or other international sources. The ELFS data is then related to aggregate figures for output, productivity and employment, showing that there is no easy relationship between the variables: FETE is, according to our (limited) data, of no great significance for output and productivity growth over the period 1983-89, but growth of participation rates in FETE seems to be linked to employment growth and labour market mobility. This counterintuitive result is discussed in some length as it does not correspond with findings at lower levels of aggregation.
To give more insight into the training strategies of firms and to discuss also the regional dimension of FETE, findings of "case studies" done in selected regions of the countries included in our study are summarized in the appendix.
The major results of our study are:
1. Financial arrangements and the distribution between public and private (firms, individuals) financing of FETE vary considerably between our countries, although most of FETE costs are borne by the firms themselves. Public intervention in direct FETE financing is rather marginal, but there are a variety of incentives, taxes and supporting institutional arrangements which to some extent structure the very heterogeneous field of FETE. A rank order of our countries, going from a "free market approach" to a highly regulated structure of FETE is as follows: United Kingdom, Italy, Germany, France and Denmark, the divergence being especially large between the UK's system since the reforms and that of the other European countries.
2. The ranking of countries according to the number of employees participating in FETE based on ELFS is: Denmark, United Kingdom, Germany, France, Italy. But these figures have to be interpreted with caution as they are not based on common definitions. Other figures show a rather similar participation rate for the United Kingdom, France and Germany. All sources confirm the leading role of Denmark and the poor record of Italy.
3. However, quantitative participation figures have to be controlled by indicators of quality. Thus it seems that the FETE system in the UK has also to compensate for a deficient initial training system, whereas in Germany FETE can build on the existing foundation of initial training.
4. In all countries FETE participation rates depend on initial qualification held, professional status, but also an firm size and sector. The general picture is: the higher the qualification already reached and the higher the professional status, the more further training can be expected.
Participation is much lower in small firms and in certain sectors (mainly composed of small firms), factors which sometimes outweigh individual attributes: an unskilled worker in the French steel industry can expect to get three times as much further training as an engineer in the construction industry. The share of un- and semiskilled participants in FETE is higher in the United Kingdom, Denmark and France than in Germany.
5. Regression analysis with quantitative ELFS figures and aggregate indicators of economic growth, productivity and employment in the period 1983 - 1989 show counterintuitive results: a weak negative
relationship with productivity and no apparent relationship with
economic growth together with a positive relationship between employment and FETE participation would seem to indicate, thatFETE depends on labour market dynamics more than being a driving
force for overall economic growth. However, in the light of diverging results at sectoral levels, this relationship has to be analyzed further.6. In general, public programmes have a rather poor image with training
managers depending on countries and type of firms. Often firms usedpublic money for training in economic downturns or to cope with
structural adjustment problems. It is generally claimed that public money benefits the weak but is not available for successful firms thus pointing to the fact that public training policy for the employed plays a primarily subsidiary role. Increasingly, training is not only seen as a necessity to run ever more complex production processes and to assure new methods of working (group work, just-in-time, etc.), but also as a
"fringe" benefit attracting personnel and ensuring employment stability.
This would imply that training-intensive firms are precisely those which run the least danger of having their personnel "poached".
As far as the evaluation of FETE instruments is concerned, the "state of
the art" is still embrionic. For example, only big firms assess the training efforts they undertake but usually more through instruments like questionnaires, exams, and assessment of trainees by trainers than through cost/benefit analysis or other complex evaluation techniques.
Cost control seems to be the main reason behind changes in training policies, rather than an assessment of training output in relation to the input. Despite the claim, that training should be considered as an investment, accounting and tax systems do usually not allow it to be treated as such. For example no deduction of amortization rates over years (as for capital) is possible. Other sources of evaluations exist, however: in the case of individual participation, longitudinal studies (panel studies) usually analyse the (positive) relationship between training and earnings, larger scale surveys show uneven access to training, while comparative sectoral studies have shown the superiority of some training systems over others.
Introduction 1
Part I: Definition, Financing and Country "Models" 3 1. Further Education and Training for the Employed 3
2. ET and economic performance 4
3. Country systems of FETE 7
3.1 Denmark 7
3.2 France 8
3.3 Germany 11
3.4 United Kingdom 13
3.5 Italy 15
4. The debate on public or private funding of FETE 16
4.1 Public spending on FETE 18
4.2 Public/Private expenditure 19
4.3 National figures on public/private expenditure 20 4.4 Conclusion on the importance of public/private
financing in FETE 23
5. Conclusions Part I 25
Part II: Training Incidence: A Tentative Discussion of European
Labour Force Survey Data and other Sources 28
1. Training participation levels 34
2. The structure of training for the employed 36
2.1 Internal or external training? 41
2.2 Sectoral distribution of training for the employed 45 3. Training participation according to other data sources 49 4. Training incidence and the quality of training 51
4.1 Cumulative or compensatory training? 52
5. Some selected results of evaluation 58
6. A tentative macro-evaluation: FETE and its relationship to
productivity, economic growth and employment 61
6.1 Employment and FETE 69
Part III: General Conclusions 72
I. Consent and controversy 72
2. Quantity and quality 76
3. Policy recommendations 78
Bibliography 81
Appendix: Case Studies 86
1. The regional dimension 86
1.1 Regional policy or regional traditions? 88
2. Training needs and policies of firms 91
2.1 Increasing training needs 92
2.2 How to meet the need for more training? 93
2.3 Low profile of public programmes 95
3. "Poaching" 98
4. Evaluation 100
Force Survey Data
Introduction
The following report is the outcome of a comparative research project into the specific shape and the function of Further Education and Training of the Employed (FETE) and the interfaces between firms and public policies in the area. The research was partly financed by the European Communities (DG V) and is part of a series of evaluation projects carried out for the DG V by the Science Centre in Berlin.
The aim of the project was to define and assess empirically the level and structure of FETE especially along the public/private divide and to shed some light on its function in relation to the initial training system.
Evaluation issues are also addressed, on a micro (enterprise) as well as on a macro (national economy) level. The countries included in the study are Germany (with the former GDR, for which a separate report was produced, cf. Auer, GroB, Kotulla, Rachel, 1992), France, the United Kingdom, Italy and Denmark.
For all countries (with the exception of West Germany, where enough material had already been collected to allow a substantial discussion of the subject) a research note based on existing literature was prepared by a national correspondent (except for Denmark, where this was done by staff of the Institute), In addition interviews with public training officials (on the national as well as the regional level) and with training managers in private firms in different sectors (metal manufacturing, telecommunications and business services) were conducted by the project leader. These guided interviews had the aim of showing how firms provided practically for their training needs, and if and how they used public programmes or institutions to satisfy these needs. Although they cannot be regarded as proper "case studies" because of their insufficient depth (given the time span it was, for example, not always possible to
enterprise policies in regard to the use of public programmes. Some
material from the case studies is interwoven with the material in the
present report, and a summary of the case sstudies can be found in the appendix. A very useful input into the present report came from the presentations and the discussion of the different countries' experiences
with FETE in a workshop held in November 1991 at the WZB (cf. Auer, Schmid, forthcoming).The material collected through secondary sources, the national research notes produced, the interviews conducted and the workshop's discussions were supplemented by data contained in the European Labour Force Survey (ELFS). This data source is the only one from which
comparative conclusions can be drawn, but has its weaknesses, as the responses given refer only to training done within the four weeks prior to the date of survey (which might underestimate the actual rate of participation during a year). Also the definitions used and questions asked are not strictly the same in all countries, and the survey is based on self
assessment of individuals and interpretation is left to individual countries.It therefore permits only cautious international comparison, requiring
assessment using material from other sources.The report starts with a short definition of the subject and presents the
arguments for the increased need for further vocational training for the employed. It then describes briefly the national systems of FETE, in an attempt to show that there are different "country models", especially seen from the angle of the public/private divide in FETE. Within the
framework of these national "models" and the results of the case studies,
the data of the European Labour Force Survey (ELFS) are discussed.
Within this section, data from a single selected region in each country are also compared with national figures. In the conclusion we discuss the role of training for economic and labour market performance, and address the
question of whether FETE can be considered a crucial variable of
economic success as is claimed by many authors. For that purpose we have conducted macro level analysis, linking our data with data on GNP, productivity and employment provided by the OECD.1. Further Education and Training for the Employed
Very pragmatically FETE is defined as training directly related to jobs and employment going beyond the level of initial vocational training, usually
above an initial certification. However the borderline between initial and
further training is in some systems (which lack certification) more difficult to define than in others. For example in Germany the official definition for further training "Weiterbildung" (contained in the law on the promotion of employment of 1969, AFG) is vocational training occuring after a period of work experience following initial training - typically six years after first entry into the labour market, that is about three years after the end of initial training. But even in Germany "Weiterbildung" in reality does not stick to that provision of the law which wanted to introduce a period of work experience before training or retraining: firms, starting retraining on their own without public help (the typical case) may do so right after the end of initial training. While it makes sense to talk about "further training" in a country with a clearly defined curricula and certification of initial training, this is more difficult in a country like France: here someone leaving vocational school with a certificate (e.g.
CAP "Certificat d'Aptitude Professionnel") will need a period of
"induction" training in the firm, which can be either labelled "initial" or
"further" training depending on whether it is judged against individual qualification or the job experience. In a country like Great Britain, where skills are often learned on the job and individual skill profiles are shaped by experiences in different jobs and firms, each newcomer will get some training which could again be labelled either as "initial" or "further"
training.
Moreover, the distinction between (vocational)training and (general or basic)education is sometimes blurred: as basic education such as mathematics or better literacy is becoming so important for working life today because of technological progress and communication needs in new
definition and in the institutional framework of training rather than "real"
differences in comparable items. Consequently, the ELFS data have to be discussed within the framework of training institutions and traditions of
each particular country. Important elements in our practical definitions of
FETE are therefore the employed status of the individual, the vocational orientation of ET and its character of being beyond initial vocational training. What is excluded from our definition is general education which serves the purpose of personal development and is not directly linked topresent or future jobs, initial ET whether job related or not, and all ET
measures for the unemployed.2. Education and Training and economic performance
It is often argued today that the whole system of education and training is an important and even decisive factor in the competitiveness of firms, sectors, regions and nations. This argument refers to both initial and further training and usually includes even general education as it gives basic qualifications which can be used in working life (Finegold and Soskice, 1988). The systems of work-related training (including the vocationally relevant parts of general education), although being only one of the factors affecting competitiveness, do help determine whether a country enters either a vicious circle of low skills, low quality products, low
profitability, low tech and so on, or instead a virtuous circle of high skills,
high quality products, high productivity and high tech. (Boot, 1990;Rubenson, 1987, Employment in Europe, 1991).
It is also argued, that the market segments in which industrialized market economies have a competitive advantage, are precisely the upper segments of high quality goods and services needing for their production a
highly skilled work force (Matzner/Streeck, 1991).
Sectors (and countries), which have a large share of such products,
training systems it has been demonstrated, for example, that compared to Germany and even to France, the United Kingdom has a lower skilled work force in many sectors and that this adversely affects products (lower standard, mass-produced goods) as well as processes and productivity (Steedman and Wagner, 1987, Prais, 1981 and 1983, Campbell, Sorge and Warner, 1989). Other authors found Great Britain in a "low skill equilibrium" (Finegold and Soskice, 1988). Porter's work on the
"competitiveness of nations" (1989) stresses the importance of the vocational (and general) training and education system as an important factor affecting national competitiveness. Denison (1988) even estimates that more than half of the productivity increases in the U.S. economy between 1929 and 1969 are related to on-the-job training and learning. He showed that training contributed more to the rise in productivity than technology.
Usually these authors underline the importance of training as an independent variable which in turn favours competitiveness, economic growth and eventually employment growth, and there is a lot of evidence that for the VET system in general this holds true, although it seems as hard to quantify the actual impact of training and learning in the production function for labour as to account for the exact contribution of technology on the capital side. Applied only to FETE alone, this causal chain is still more uncertain (at least for some of our countries) because high FETE participation rates might only compensate for the deficiencies of the initial training system. In other words, a quantitative indicator such as FETE participation needs qualitative specification in order to be of help in understanding the contribution of FETE for economic performance.
Besides the general arguments showing the importance of VET as a strategic economic variable there are other arguments which stress the increasing importance of FETE in supporting economic growth and promoting equality on the labour market. There is on the one hand the
of adaptation of the work force to more complex technology and forms of organization could be hindered by demographic change: the "baby bust"
generation which has already entered or will enter working life in the coming years is less numerous than the baby boom generation so that the skill needs cannot be satisfied any longer by external recruitment of young employees alone, especially as participation rates in (general)education tend to rise as well. Training has therefore to be targeted more than in the past at the already employed. Schmid (1990) shows, that in 2020 the projected share of youth (15 to 24) within the population of working age in the OECD countries will only be 18,4 % whereas it was 25,8% in 1980. The share of the 55 to 64 year-olds will increase to 20,7 % (from 14,6 % in 1980). Because of these developments, the average age of people already in work will rise and age is said to have a negative impact on individuals' capacity to adapt to change. This again increases the need for training. It is also argued that those most in danger of losing out in structural change are the least skilled who need a particular effort in training. It is therefore believed that training is an instruments which can address efficiently economic and social goals at the same time.
The need to increase participation in FETE and to enhance its quality is a widespread concern, and the question of how to create efficient,or to amend existing (public) institutional arrangements is very much on the political agenda (Schmid, 1990). Acknowledging the importance of FETE, in 1990 the European Commission enacted a programme of action on further training for the employed (FORCE), which will stimulate practical activities and research in the area and also try to bring a "European Dimension" to the topic.
In order to understand the outstanding features of the national policies and institutions of FETE, we begin with a short caracterisation of the FETE systems in the five countries of our sample.
main organisational features. In particular we stress the role of public policy in this field and discuss the public/private "divide" in financing of FETE in part 4.
In principle various types of public policy intervention are possible.
The government can provide subsidies for training (to trainees or firms), can grant tax reductions for training expenses, impose financial obligations and/or an obligatory training leave, regulate curricula and certifications and provide a network of publicly run training institutions.
Presenting salient features of the FETE "system" in different countries is a difficult task, because further vocational training cannot be characterised as a system. It is more a "mixture of market elements and uncoordinated, isolated training interventions" (CEDEFOP, 1990). We have, however, tried to characterise these systems, well aware that this marks only a beginning of research on the topic and not its end.
3.1 Denmark
Denmark is the country where, according to all data we have (on financing and participation), the role of public policy in FETE is strongest. But beyond this, there are important differences as to how public intervention is organized in different countries. In Denmark, public policy is not only restricted to the central state and regional bodies and public authorities in the strict sense. Indeed the salient feature is the relationship between public authorities and the social partners in the field of training. Central, nationally valid regulations go together with cooperative "social partnership" types of policy making, implementation and administration of training. On the one hand, there is state intervention and, since 1984, a training levy (which is collected in a fund for further training, AUD) imposed on all employees and all employers. The amount of this lump sum levy is decided each year by parliament. There is also a network of public (or quasi-public) training institutions which provide FETE. On the other
hand, employers and trade unions play a large role in the handling of the system. An important part of FETE in Denmark (the short-term modular courses for the semi-skilled) originated in the semi-skilled union's claim for further vocational training for their members. This training system for the semi-skilled, set up by law in 1960, was paralelled in 1965 by courses for skilled workers, which are organised and financed similarely. The courses are set up in tripartite branch commissions and geared rather narrowly to employer needs, the labour market authorities (and a tripartite training council) however having a say on curricula and certification. According to Frederiksen et. al. (1987) the role of the authorities (the AMV directorate) is rather weak and is confined to that of a mediator between the parties in the branch commission. There is presently a "market oriented" change in the system which provides for more taylor-made courses of FETE for firms, but where firms have to participate to a large extent in financing (the so called VTP courses for which the state pays the teachers and half of the compensation for the employed, and the IDV courses, for which firms pay the whole "training bill").
Besides the close involvement of the social partners in the whole .system, the specific financial arrangement (training levy paid by employees and employers alike, the levy being deductible from taxes) results in a large financial participation of individuals as well as enterprises (the distribution of the actual lump sum of 1040 DKR is 43%
from employees and 57% from employers).
The dominant feature of public intervention in the Danish system of FETE is its interwovenness with the institutions of the social partners, and although the state acts as regulator via legislative rule-setting, the system
cannot be considered as state interventionist.
3.2 France
This is different in France, where a statutory levy for FETE (formation professionnelle continue) was introduced in 1971 based on a collective bargaining agreement. The levy, which was 1,2% until 1991, has stood at
therefore more an obligation to train, the payment of the levy being considered as a sanction. However, mainly because of the difficulties facing small firms, so called "mutualisation funds" were installed, which collect money not spent under the 1,2% (1,4%) obligation and spend it on training activities. Even in this case, the French levy is different from the Danish because the state in France prescribes only in very general terms on what the money has to be spent (0,75% of the 1,2% has to be spent on FETE, 0,3% for youth programmes and 0,15% for individual training leave CIF), the selection of individuals, courses and training providers being left to the firms. The increased contribution (1,4 and 1,5 %) will entirely benefit FETE, as only the "conge individuel de formation" (a "second chance" training for the employed without qualification after some tenure) and general training will see their share increased. In Denmark the levy finances the long-established schools and centres for further training of semi-skilled and skilled employees and the wage compensation of trainees. Although in principle employers in Denmark are also completely free to choose the type of training and the people they think fit, such an organized and well established system in turn structures further training participation to a large extent. Consequently, the share of public providers is much higher in Denmark than in France.
France also has training funds, however, which are mainly financed out of the state budget (Fonds de la Formation Professionnelle et de la Promotion Sociale - FFPPS - and parts of the Fonds National pour I'Emploi FEN) and also participate in financing training activities for the employed. Such activities concern for example training for restructuring.
The so called "conges de conversion" were meant to introduce a period of retraining before dismissal and to put an obligation on the firm to find jobs for redundant workers. Whilst the length of the training period reached up to two years in the steel industry it was subsequently shortened
to 5 months. At the same time the measure was extended to all branches
and is now an obligatory element of "social plans" in cases of redundancies. However, the regulation of "conversion training" has
changed: One now has to be declared unemployed in order to benefit from it. Before, one remained formerly employed until the end of the reconversion period.
A rather recent development are the so called "negotiated modernisation" packages which include the financing of counselling for training and also proper training activities. As interesting as the
"negotiated modernisation package" is, especially because they support policies of preventive manpower planning, one has to bear in mind that training for the employed financed by the public authorities accounts for only 9% of the total (public) spending on training.
The social partners negotiate at national, sectoral and increasingly also at enterprise level (there is for example a law as well as a national collective bargaining agreement on further training) and bi-and tri-partite structures of "concertation" on further training do exist. In addition employer associations and trade unions administer the "mutualisation funds" which distribute some of the money under the 1,4% obligation to training initiatives of small firms. From the formal side then, employers and trade unions participate in the shaping of the training system. In practice, however, the influence of the trade unions on further training policies is weaker than in Denmark or Germany (especially as far as certification or implementation are concerned). This has to do with the general weakness of trade unions in France (caused also by their division into five unions) which have not succeeded in introducing more than a consultative right on the matter at enterprise level, and with the absence of a significant "social partnership-type" tradition. However, as the present national level discussion and its outcome have shown, training is one important area of policy-making for the social partners.
Even if the obligatory levy system, the system of declaration (training activities have to be declared to the authorities) and the tradition of endorsing collective bargaining agreements by law seem to be another proof of the French state's strong role as a regulator of economic life, the absence of control, certification and a large system of (public) training providers, casts some doubt on the administration's real strength to impose a further training policy for the employed. It seems as though much
of that policy is in the hands of the employers. The statement is not altered by the introduction in 1987 of a tax rebate for firms which train above the 1,2% (1,4 %)level, which has so far had a rather modest influence.
3.3 Germany
The description of FETE in France is also largely valid for Germany. Most of further training for the employed is done by and often in enterprises.
And, while initial training is well regulated, further training leaves a lot of freedom to enterprises and/or other organisations like training institutions. Although trade unions and employers participate in the organisations which are responsible for setting up new regulations for further training, the "regulatory state" is considered -by unions and experts- as being unsatisfactory (Streeck et.al. 1987). The German system of public further training appears in general to be strongly based on the promotion of individuals rather than the promotion of firm's training strategies which is left to the firms themselves. Based on a series of case studies, Gehin et Mehaut (1989) put forward the argument that, because of the relatively wide coverage by the initial training system, and the fact that it ensures a certain equality of access to jobs, all that comes above that level is left to a much larger degree to the individual concerned without public intervention. In France, by contrast, firms and the state have often to compensate for the lack of initial training, and therefore intervene also more in continuous training. However, up to 1975 the training programmes under the employment promotion law (AFG) were used to a large extent by workers to upgrade their skills and advance in career, contradicting Gehin et Mehaut's arguments as far as public training in that period is concerned. Since 1975 the government has targeted its training programmes at the unemployed, and in 1990 about 66% of entrants into publicly financed training were in fact unemployed.
Although the remaining 34% are employed, it is unusual for firms to be able to satisfy their specific training needs via the public scheme. The whole public system is more geared to take into account the individual's training needs whether or not he or she is unemployed or employed: it has
to be assumed that a large number of the employed workers in public training schemes are in fact career advancers and have to be considered as only "formerly" employed as they will frequently change their jobs after training. The financial participation of the state in career advancement training has been restricted and is sometimes given only as repayable grant, (affecting 12% of all participants in 1990, BMWB, 1991). A further 12% of all participants in publicly funded training undergo "induction training" (betriebliche Einarbeitung).
Streeck et.al.(1987) note the new division of labour between public authorities and firms: The latter are more concerned about training their (higher skilled) workers, public authorities more about the reintegration of the unemployed and the training of those at risk of becoming unemployed. There is no levy on further training in Germany, but as training under the AFG is financed in principle through a portion of employers' and employees' contributions to unemployment insurance, some refinancing via individuals and employers exists.
Despite the fact that most further training is employer based, unions have more formalized rights to co-decide on further training at the enterprise level (via the works councils) than for example in France. This right seems to be extensively used in large firms but not so much in small firms. At the sectoral level, contrary to the case of initial training, the role of the social partners is weaker, but it is important at national level.
Regulations at national level (certification, etc.) are issued only if a consensus between the social partners exists. Participation in the training committees of the regional chambers of trade is another possibility for participation in training (Streeck, et. al., 1987).
Compared to Denmark, further training for the employed in Germany seems to be more enterprise based and less closely regulated by the state or the social partners. The main vocational training effort is still on the
"dual" initial training system which is well structured, regulated by law and the social partners, whereas further training is left to a larger extent to
"market forces" and leaves a larger scope to the individual needs of firms.
3.4 United Kingdom
Compared to the other countries, the vocational training system of the United Kingdom shows a greater (institutional) instability. In addition,
"market forces" seem to play a much more decisive role. In fact, it is only in the United Kingdom, that the system of vocational training has been radically reformed in recent years, except for pure on-the-job-training which plays a strong role in Britain and explains to some extent the rather high incidence of (further) training among the workforce. The intention of the recent reform was the privatisation of a service which was formerly publicly provided, the decentralisation of service delivery, and the integration of local business in decisions on the distribution of public funds. Meager notes that the reform is also based on the idea of "value for money", the government believing "that a given sum of money will go further in the hand of businesspeople, operating in a private sector culture, than in the hands of civil servants in a public sector culture"
(Meager, 1991).
This reform came about in a numer of steps during which the Manpower Service Commission (a tripartite body responsible for the delivery of British training and employment programmes) and its successer, the Training Agency were progressively dismantled.
At national level the remnants of the Training Agency were integrated into the Employment department, the actual delivery of programmes was handed out to a network of more than 100 local "Training Enterprise Councils, TECs" in England and Wales, or "Local Enterprise Companies, LECs" in Scotland, which are run as private limited companies and are headed by a board on which local employers have the majority of seats.
Without a doubt, the reform is far reaching in organizational terms, as the TEC'S role includes the delivery of the governments training and employment programmes, the assessment of skill supply and demand and the detection of mismatches in their local labour markets, etc. A main aim of TECs is also the enhancement of FETE. However, the changes in the public training system seem not to alter the overall status of FETE, as the TEC's are still ill equipped to cope with that particular problem. In fact.
their day to day work is actually overwhelmingly directed towards the delivery of public programmes for the unemployed (ET) and youth (YTS)
and little attention and a small volume of funds can be directed to FETE.
Some TEC managers try hard to find ways to change the situation, but experience the dilemma of the administrators of public labour market programmes: their clients are target groups which are hard to place in the labour market (this holds particularly true for the (long-term) unemployed in the "Employment Training" programme, but also for the initial training of youth in the YTS) whose employment characteristics do often not correspond to the skill profiles sought by firms, which prefer to recruit by their own choice and train on-the-job. This makes the British firm-based approach somewhat questionable and it does not seem to be the sort of support for training which firms are looking for. The currently rising unemployment rates will not help this situation. In practice then, although the delivery system of public training (and public labour market policies) was profoundly altered, the division of tasks in the British FETE system has so far remained more or less unaltered: firms train their employed themselves on- or off-the-job, and the now privatized delivery system of public programmes copes overwhelmingly with the unemployed and youth. Other aspects of the reform could have a greater, and possibly negative impact on FETE: e.g. the dismantling of almost all sectoraily organised "Industrial Training Boards (ITBS)" which acted as training service providers for firms and were financed by a compulsory levy. In place of ITBs, firms in certain sectors created non-statutory training organisations at sector/industry level which have roughly the same function as the ITBs with the difference that they receive fees paid voluntarily by participating firms. Also, the (public) provision of FETE in colleges of further education, run up to now by the local authorities, is changing. In a market-oriented approach, firms increasingly have to pay for courses provided by these colleges, the resultant income serving also to finance their other activities. Contrary to what happened with public employment-training programmes, the colleges are to be taken out of the control of local authorities and brought - initiallly - under central authority. In a second step, private funding boards are to be established and one can assume that further privatisation of these public institutions
will follow.
In conclusion, a clear process of market-oriented reform has occurred which has privatised and decentralised the delivery of formerly centrally administered programmes, abolished all compulsory elements in sectoral training organisations, seen the "commoditization" of services by colleges to firms, destroyed bipartite or tripartite commissions and committees, and has given employers the say on British Training. It seems that the centralisation of the colleges of further education has to be seen only as a first step in the dismantlement of local authorities' political control which will be followed by policies (e.g. with regard to funding) which will further privatize FETE efforts.
3.5 Italy
The main features of the Italian system are subject to great (regional) heterogeneity because the responsibility for initial and further vocational training has been given to the regions (by the law Nr.845 in 1978). Public training policies are however more directed at initial training either in state schools IPS, in an apprenticeship system similar to the British "time- served" system with low formality, and -increasingly important- the so- called employment-training contracts, whereas publicly provided FETE is not strongly developed. Some of the regions (like Emilia Romagna) have developed training incentives to support qualification in this "industrial district", while others concentrate more on initial training. In a partial case study of training in Lombardia, where the incidence of training for the employed is higher than for Italy on average, according to the European Labour Force Survey (see Part II of this report), FETE was publicly supported only in cases of (internal and external) restructuring.
Only then was it possible to get co-financing from the European Social Fund (paying half of the costs) which was a necessary condition for funding. From 1989 on rules were changed and became more selective. For workers in employment ESF financing stopped and as a consequence, public FETE financing in Italy - linked to ESF initiatives - was also restricted. In Lombardia, the funds allocated to FETE in 1991 were only a
tenth of those in 1989, when ESF co-funding was still possible.
Public support for training of the employed is therefore weak in Italy and FETE mostly has to be undertaken by the firms themselves. Big firms (like Fiat or Olivetti) do adequately train their staff, but smaller firms usually cannot or do not engage in training initiatives for their personell (Forlani, 1992). Although a central fund for training (the so called
"rotation fund", financed by a levy of 0,35% paid by employers) does exist, most of its money serves the training of the unemployed and helps to finance the transition from school to work through "employment-training"
contracts.
Preference for initial over further training exists for financial as well as for institutional support, the (regional) centres for vocational training serving initial rather than further training. However, because of the large regional differences such statements do not have general validity: a thorough analysis of Italian FETE has to be done on a region by region basis, and cannot be undertaken by this project. However weak public institutional support for FETE and the training activities of firms may be in Italy in general, the north/south divide in the economy and in the labour market finds its parallel in training - less developed in the south, more so in the north (see also Goldin, 1992).
4. The debate on public or private funding of FETE
As training is increasingly regarded as a crucial factor for the economic success of firms, regions and countries, a debate has arisen on the specific role that public authorities, private firms and the individual have to play in the field of FETE. As far as the public/private dimension is concerned,
the two extremes of the debate are the hands-off and market-oriented
approach which considers that further training for the employed is best left to the private sector's initiative alone (which is the argument underlying British public training policies), and a regulation-oriented view that FETE should be more tightly regulated and controlled by the public authorities (for ex. Maier, Mahnkopf, 1990). There are many intermediate
views in the debate, but a growing majority of authors are demanding more public-institutional support for further training of the employed which should, however, remain basically enterprise-based (Osterman, 1988;
Finegold and Soskice, 1989; Freeman/Soete, 1991, Schmid, 1990).
Important in this regard is the problem of "externalities": such externalities arise if, for example, a firm makes sa considerable investment in training for employees who, after having received training, then join other firms. It is assumed that under such circumstances, firms will refrain from training, if the marginal returns from training investments for the individual firm are less than the costs of training, and the economy will eventually enter a vicious circle of underinvestment in training. One of the ways to deal with the problem is to set incentives for positive externalities (created by the training effort) or negative incentives (taxes) for the "poacher". Another would be to assign "property rights" by introducing "anti-poaching" clauses in contracts, stipulating repayment of not yet amortized training. Co-investment, the participation of the individual in training, is also seen as one way of overcoming some of the problems of externalities. That this is far from being a purely academic debate is shown by the recent national collective bargaining contract in France which introduces the possibility (depending on former branch level agreements) partial repayment of training costs, if a worker leaves a firm shortly after having received training, and also introduces the notion of co-investment for training of a duration beyond 300 hours a year.
In view of this it is interesting to look at the empirical evidence on the respective role of public and private financing of FETE as it appears in training statistics and other material. One has to be aware that in this particular field national data is rather scarce and often contradictory, and comparative data hardly exists.
The first question which can be asked relates to the total amount of money spent on FETE in the different countries. This is a rather difficult task as definitions (initial/further training, general/vocational training), costs included (institutions, programmes, wage compensation etc.) vary across countries. We cannot control for the reliability of the comparative statistics available, as we do not have details of all the items entered into
aggregation. We can however compare these data with some national data and infer whether they are grossly misleading or are "in trend". Again it is not only difficult to compare data between countries but also to compare for example public spending and private spending in one country (see for example the report on vocational training for 1987 published by the German Ministry of Education and Science, BMBW, 1987).
4.1 Public spending on FETE
Table 1 shows public expenditure for adult labour market training as a percentage of GDP. In most of the countries of our sample, public training support is targeted mainly on the unemployed, whereas programmes of support for the training of employed adults (that is basically further training) are very much the exception. These very general data do not challenge conventional wisdom or contradict our own findings. Denmark's labour market authorities spend by far the most on employed workers, a fact which is confirmed by high participation rates in further training for the employed. All other countries spend considerably less, the United Kingdom spending, according to the OECD, only 147 million pounds a year for training of the employed (see table 1). The largest share of public money for training goes to the unemployed and to youth. For Italy figures are not available on a comparative basis.
Table 1
Public expenditures for FETE in Relation to GDP *
total tor employed lor unemployed
adults and those at risk
Denmark 0,47 0,24 0,23
France 0,32 0,04 0,28
Germany 0,32 0,07 0,25
UK 0,23 0,01 ^ 0,22
Italy (0,03) - (0,03)2
Source: OECD, 1990
OECD: employed/unemployed adults 1988 except DK (1987) and UK (1989/90)
^ only grants to enterprises
^ estimates LFS (source: Reissert)
So far, these data tell us only that public programmes targeted at the employed are the exception and not the rule. However, data on public labour market programmes alone are rather misleading in measuring the total impact of public spending in further training, as costs for infrastructure (like further training colleges) or the general availability of certification and other regulations are important policy supports as well.
4.2 Public/Private expenditure
The available statistics give a somewhat contradictory picture of the training expenditure for the employed by firms, the public sector and
individuals.
CEDEFOP has published comparative data concerning the distribution amongst different financing sources for further training of the labour force as whole (including the unemployed). Also Boot (1990) has collected data on the distribution of financing for FETA (further education and training for adults) but adds "that only the figures for France and the Netherlands are reliable", the others being based on small surveys and the like. He does not discriminate between the employed and the unemployed.
Table 2
Distribution of expenditures for further training
FRG F UK
Cedefop
public expenditure 25 53 20
private firms' expenditure 50 43 51
individuals (households) 25 4 29
public expenditure (1985)
(1986) (1986)
12 34 16
Boot employers 87 66 76
trainees " " 8
Sources: CEDEFOP, Flash 1/90, Boot, 1990
No attempt will be made to explain the differences between the two sources of statistics, lacking comprehensive information on their
respective data bases and definitions, and we report them here only to show the considerable differences that exist in published comparative data. One "representative survey" does not conform to another and there are as yet no convincing comparative statistics on the subject. The data cited confirm however one fact: firms contribute the highest share to further training followed, at a considerable distance, by public authorities (only CEDEFOP figures for France show that public authorities have the highest share in expenditures). Individuals contribute to a rather minor extent in Boots data, their share being much higher in CEDEFOP's data.
But the CEDEFOP data base seems to be rather weak on that point as is stated in the notes. It has to be added, that we do not always know what the individual's contribution covers: foregone earnings and/or actual expenditure for training as in the case of the UK ?
4.3 National figures on the public/private expenditure
According to the Employment Department's Training Statistics for budget year 1986/87, the distribution of total costs (33 billion pounds in all) for training in Britain is: 54,5% employers, 21,2% government and 24,3 % individuals, a distribution rather similar to the CEDEFOP figures. But here all training is included: if we subtract from the government's costs the expenditure for government training schemes which are overwhelmingly targeted at the unemployed (1,5 billion) but add government spending on training as an employer (5 billion) and deduct the costs of training the armed forces from the employer's share we arrive at a rather equal distribution between private and public expenditures (37% private, 36%
public, 27% individuals). However, we do not know how much of this money was spent on initial rather than on further training.
For Germany (before reunification) data on training costs vary enormously according to sources: if we are to believe the employer-linked Institut der deutschen Wirtschaft (IW) employers spent 26,2 billion DM on further training in 1987. For the same year public training expenditure amounted to 8,2 Mrd. DM. As far as individuals are concerned, no figures are available: more than a simple omission, this shows that individuals'
losses of earnings during further training are not considered as a training cost in Germany. If we simply add up these two numbers we come to a distribution of 24% public and 76% private, which is rather near Boot's figures, but very different from CEDEFOP's distribution. But, employer- based figures have been contested on the ground that training-intensive firms are overrepresented in the sample. DM 5 billion has been calculated as an alternative (Bergner,1987), but this figure is contested by employers.
(BMBW,1988). Also for 1984/1985 two alternative calculations have been made, one arriving at DM 10 billion, the other at DM 15 billion. These diverging figures are commented in an expertise on further training for the German ministry of education as follows:"such diverging figures show the uncertainty in data" (BMBW, 1990).
In Germany a large percentage of public money is spent on initial training and training for the unemployed, which has to be excluded from an account of the expenditure for further training of the employed. If one takes into account that in 1987 about 64% of the participants in public further training programmes financed by the Federal Labour Office were unemployed before entering training, only a roughly estimated DM 2,5 billion has been spent for the employed (if we assume that costs for employed and unemployed trainees are the same). One has to add that although a growing percentage of public training involves the participation of firms (30% in 1990 compared to 24% in 1987), this does not mean that it is training for firm specific needs (except for those 12% of participants in publicly financed "induction" training, Einarbeitungszuschiisse).
If we compare the figure of 2,5 billion with the lower estimate for employers' cost, we arrive at a 1/3 to 2/3 public/private weight in financing further education; if we compare it with the higherestimate a 9(public)to 91(private) percent relationship results. The private sector's share is likely to be somewhere between these extremes, and the estimate of public sector spending would increase, if we had figures for training by the government as an employer. But unfortunately such a comprehensive data base which would allow us more than very rough estimates does not exist (see Berufsbildungsbericht 1991, p. 151).
As far as the former GDR is concerned, the data have to be considered
as preliminary (data refer to 1990): here in statistical terms fewer unemployed participate in publicly financed further training (only 47%
compared to 66% in old West Germany), but one has to add 36% who were on a short-time working scheme and, although they are statistically considered as employed, most likely do not return to their firm after training. Public expenditures for the employed (including those on short- time working schemes ) amounts to about DM 270 million. No estimates on private sector training are available.
In 1988, in France the distribution of expenditures for all (initial and further) vocational training is as follows: firms 60%, public authorities 40% (Serfaty,1991). However, only a minor part of public money is spent on the employed, the largest part being allocated to the unemployed and/or young labour market entrants. In 1989, only about 8,5% of the state's money was spent on the employed, strictly defined. Although firms also spend some of their training funds on young "stagiaires", the largest part of their funds is allocated to further training of their employees, not least because of the special financial arrangement (tax liability if firms which make no effort to train) in France (see above). The French regions, although they bear in principle the responsibility for training since the decentralisation law of 1982, finance as yet only a minor part of training activities. However, about 50% of their expenses benefit the employed. If we take all this into account and make the "heroic" assumption that employers spend about 25% of their training budget on young stagiaires (0,3% of the obligatory 1,2% - 1,5% from 1993 onwards - pay-roll contribution to training has to be allocated for this purpose) we arrive for 1988 at the following public/private distribution for further training of the employed: public 13% / private 87% . Again, if we were to include the money spent by government as an employer, the figures would change rather dramatically, as public firms in France spent considerably more on training than their private counterparts (CEREO,1990).
Figures for FETE in Denmark show a rather equal distribution between public and private financing if we consider only further, vocational (and not work-related, basic) training. According to national data, in 1989 about DKR 2 billion were spent by public authorities on
further training and 1,7 billion by private firms. This results in a 54% to 46% public/private financing and shows the importance of publicly provided training in Denmark, (see below).
In Italy the distribution between public (regional and national) and private expenditure reads as follows (1989): public 58 % (regions and central government including the "rotation fund") private 29 %. (Data based on ISFOL and CENSIS, see Goldin, 1992) The remaining 13 % come out of the European Social Fond which is an important source for financing (further) training in Italy (see also Mehaut, Villeval, 1990). If we add ESF money to the public share we arrive at a 71:29 % public/private distribution in Italy. However, this distribution includes all vocational education and training, irrespective of its "initial" or "further" character.
In further training the private firms share is certainly much higher as most of government money (regional and national) is used to finance initial training and a large part of ESF money is also allocated to that purpose.
Very often, it was money from the European Social Fund which is used to finance training in cases of restructuring, and such training was usually financed on a 50 to 50 % basis by the ESF and the region via the so called
"rotation" fund (Mehaut, Villeval, 1990).
4.4 Conclusion on the importance of public/private financing in FETE In all our countries -with the exception of Denmark- private firms spend a larger share on training for their employees than public authorities do. A division of labour seems to have developed: public authorities mainly support and fund training for the unemployed and youth in transition from school to work, whereas firms train their personnel on their own. However, once we also include the government as an employer, this picture changes:
public-sector training intensity in many countries exceeds the intensity of training in the private sector. But because of the uncertainties with the data no clear comparative picture of the private/public divide can be given. In summary, we find in the financial statistics precisely the problems we discussed in the introduction: as long as there are no clear
