Is Skills Training on the Decline in the US?

Employer-sponsored training plays an important part at all levels of business. On the individual scale, employee-sponsored training can improve productivity and expand employee skills. In turn, a well-trained workforce can improve the performance and efficiency of a business. Broadly speaking, if a majority of businesses adopt employer-sponsored training, the economy as a whole becomes more competitive. In his paper published in the March 2016 issue of ILR Review, “Did Employers in the United States Back Away from Skills Training During the Early 2000s?“ C. Jeffrey Waddoups discusses the decline of employer-paid training in the United States during the 2000s, and what implications this holds for employees and businesses.

Dr. Waddoups offered this quick insight into his research and findings:

Employers’ investments in training are an important source of human capital, which enhances the productivity of workers and firms, and increases the competitiveness of our economy. My research finds a troubling decline in such training between 2001 and 2009. Although workers are more trainable than ever, as evidenced by their increased educational attainment, firms — especially large firms —  have nevertheless reduced their commitment to training over the period.

The abstract from his paper:

A number of recent studies suggest that employer-paid training is on the decline in the United States. The present study provides empirical evidence on the issue by analyzing data on employer-paid training from the Survey of Income and Program Participation, a nationally representative data set. The findings reveal a 28% decline in the incidence of training between 2001 and 2009. Very few industries were immune from the decline, and the pattern was evident across occupation, education, age, job-tenure, and demographic groups. A decomposition of the difference in training incidence reveals a diminishing large-firm training effect. In addition, the workforce appears to have had the educational credentials by 2009 that, had they occurred in 2001, would have led to substantially more training.

You can read “Did Employers in the United States Back Away from Skills Training During the Early 2000s?“ from ILR Review free for the next two weeks by clicking here. Want to know all about the latest research from ILR Review? Click here to sign up for e-alerts!

Jeff Waddoups is a professor in the Economics Department at the University of Nevada, Las Vegas, where is currently serving as department chair and teaches courses in labor economics, macroeconomics, health economics, and statistics. He has published articles on several topics in labor economics and industrial relations, including collective bargaining in the hospitality and gaming industries, the incidence and determinants of job training, the impact of responsible contracting policies on construction costs, and public subsidies to low-wage employers through uncompensated medical care costs. Waddoups graduated in 1989 with a Ph.D. in economics from the University of Utah.