Increasing Employment of Older Workers: Addressing Labour Market Obstacles

Is training effective for older workers?

“…Government subsidies might be one way to improve firms' incentives to invest in older workers' human capital. An example of government subsidies often used in the EU is tax incentives, present in 15 European countries [15]. Other instances are government financial grants or vouchers.…”

“…In Italy, temporary national tax deductions for employers providing training in [2001][2002] and training incentives to employers and employees in the period 1994-2004 were estimated to have no effect on training incidence for workers in their 50s [14]. Further empirical studies conclude that tax incentives are not an effective tool for stimulating training in general, with training of older workers being no exception [15].…”

“…Eligibility for direct subsidies, like financial grants or vouchers, could be conditional on training programs being certified to meet the specific learning needs of older adults, for instance by being job-related, work-specific, and self-paced. [15].…”

“…A training fund might provide grant funding for approved training plans that are oriented to the learning needs of older workers. However, it has been pointed out that, although training funds might be appealing as they can be easily designed to meet the required needs of the trainees, there is not enough rigorous causal evidence on their true effect on promoting training participation [15]. There are reasons to believe that in some cases training funds could have adverse effects, for example when the administrative costs of the fund are too high or the employers perceive the levy as an additional and unjustified tax.…”

“…The author thanks one anonymous referee and the IZA World of Labor editors for many helpful suggestions on earlier drafts. Version 2 of the article adds information on tax incentives and campaigns to counter negative perceptions of older workers and includes new "Key references" [14], [15].…”