Measuring Performance in Vocational Education and Training and the Employer's Decision to Invest in Workplace Training

Vocational education and training (VET) has received growing attention in recent years from both economists and policymakers. High youth unemployment rates in many countries, particularly after the financial crisis in 2008, have been associated with a failure by national education systems to provide individuals with the relevant skills for a successful transition into the labor market. In contrast, youth unemployment rates have remained low in Germany, a country with a traditional dual apprenticeship system. As a result, many policy initiatives have emerged with the aim of increasing the willingness of companies to offer VET in the workplace. From a business perspective, the costs and benefits of providing VET are important determinants of a company's training decisions. This article discusses the theoretical literature and various empirical attempts to measure VET performance, before looking at how these measures relate to an employer's decision to engage in workplace training.