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Three important human capital questions must be addressed by U.S. policy makers: What are the effects of employer-sponsored training? Do employers invest enough in employee training? and How will accelerating technological change affect the need for employer-sponsored training and for complementary investments in education? Four policy implications of research on labor market dynamics are as follows: (1) there is no clear empirical evidence to support either increases or reduction in incentives for employer-sponsored training, but if policy makers do decide to provide further incentives, they should examine incentives to employees as well as to employers; (2) public programs, especially public schools, must prepare a much larger share of new entrants for well-paid, higher-skilled jobs; (3) remedial education or further training may deal with the problem of high unemployment rates more effectively than creating new jobs; and (4) data should be collected systematically to allow for an analysis of the level and effectiveness of all types of human capital investments. The educational system must sharply reduce the proportion of graduates with poor qualifications. Coordination will be required among employers and educational institutions. Federal and state economic policies must address the basic problem which is that those workers with problems in finding new employment need to extend their education or training. (NLA)

By embracing education as an economic development tool, policy makers adopt a new economic metaphor--a new way of understanding how the economy works and identifying determinants of development. Development policy has shifted focus, from providing incentives for the accumulation of physical capital to emphasizing investments in human capital. Most states espouse the belief that education is their most important economic development tool. It is important to trace how this mixing of metaphors has come about and what it has meant for economic development strategies. Education has displaced industrial policy and evolved into one of the most powerful metaphors of economic development, and the five substantive chapters of this paper analyze this process. Chapter 2 examines how metaphors are used as the basis of national economic policies; chapter 3 describes development policies derived from traditional mercantile metaphors; chapter 4 describes how many states have reformulated their development metaphors over the past decade to play a much larger role; and the final chapter outlines how state development policies change to reflect these new metaphors--by means of measures to improve the basic and occupational skill of the work force, measures to promote greater entrepreneurial awareness and abilities, and measures to equip disadvantaged people to compete better in the mainstream economy. (110 reference notes) (NLA)

Economists are aware of the importance of human capital in the process of development, whereas policy makers are only now exploring its implications, pressed by demands for more jobs and higher incomes. Recent research in the dynamics of labor markets illustrates how the results can help shape education and training policy in the United States. For nearly 2 decades, the body of research stressing the importance of human capital on growth and development has grown. Economic policy debates focus on investing human capital both as a way to encourage overall economic growth and as a way to expand opportunities for the economically disadvantaged. Studies have focused on how training acquired from employers affects the work experience of employees and other work history factors as well. Although this body of research necessarily identifies general relationships, its findings help policy makers wrestling with three policy questions: What are the effects of employer-sponsored training? Do employers invest enough in employee training? and How will the accelerating pace of technological change affect the need for employer-sponsored training and for complementary investments in education? (An appendix lists data sources. A list of 32 references is provided.) (NLA)

The roles played by occupational education in the U.S. economy are changing. Because of the growing demand for and shrinking supply of skilled workers, economic success--of the nation and of individual members of the work force--is increasingly tied to educational and occupational attainments. Unless the nation increases its investment in educating and training noncollege-bound students, it faces two grave risks: overall economic growth will slow and unskilled workers will suffer diminishing economic prospects. The nation's economic success in the coming decades will depend on how well it meets, with investments in human capital in the classroom or on the job, the following imperatives that are raising the demand for skilled workers: (1) the technological imperative; (2) the trade expansion imperative; and (3) the entrepreneurial imperative. Occupational education is a way to get a job, leads to on-the-job training, leads to careers, fosters entrepreneurship, is an avenue to opportunity for the economically disadvantaged, and increases the flexibility of the economy by retooling the work force when existing skills and industries become obsolete. Annual U.S. investments in human capital already equal its investments in plants and equipment and exceed any other nation's. Education and training institutions--not Wall Street bankers--will be responsible for making most of the nation's productive investments. (CML)

This document summarizes the conclusions of research papers and participant discussions at a conference on employer-sponsored training in 1988. Following an introduction, the first section offers support for the statement that employers invest heavily in training their best-educated and trained employees. The following are among the conclusions reported: (1) employer-sponsored training accounts for about two-fifths of U.S. investments in human capital; (2) company-sponsored training is complementary to, not a substitute for, investments in academic and problem-solving skills; (3) low income employees are poorly educated and receive little training from employers; (4) nonwhite employees are less likely than white employees to be trained by employers; and (6) women are more likely to enroll in training programs without employer sponsorship and are less likely to receive training from employers. The second section addresses the statement that employer-sponsored training raises employees' wages and improves their employability more than other forms of training. Among the conclusions reported are the following: (1) whether employers over- or underinvest in training is not known; and (2) trained workers are less likely to quit their jobs. The third section supports the statement that slowing work force growth, expanding trade, and accelerating technological advances are changing the nature of work, the skills required, and the level and type of employers' investments in training. The fourth section considers what is involved in the participants' pledge to promote employer-sponsored training, strengthen academic and problem-solving skills, use training institutions more effectively, and rethink the postsecondary education and training system for the disadvantaged. The document concludes with 15 unanswered questions that suggest further research. (CML)

Overall, federal and state tax codes treat employer investments in human capital more favorably than investment in physical plant and equipment. The most important advantage is that training expenditures can be dispensed immediately, rather than depreciated over time, possibly resulting in a subsidy of 33 percent. In addition, employers who use public institutions to train their workers will rarely have to pay the full cost of these services. Employer-provided training is important for the overall growth of the economy and an important way in which many people acquire more marketable skills. However, there is no strong case for further subsidies to encourage employers to invest more in the work force. The evidence of overall underinvestment in the United States does not imply that there is underinvestment in human capital acquired on the job. Employers can use contracts to capture the benefits of the training for which they pay. However, employer-provided training rarely compensates for poor education--rather, it is concentrated on employees who are well-educated. Many useful mechanisms for subsidizing employer training of the work force are in place. Most public training institutions are already developing programs to train workers for local businesses and to train economically disadvantaged workers. Because employer training is complementary to basic education, the best way to encourage employers to invest more in the work force is to reduce the number of high school dropouts and to improve the quality of basic education. (Author/KC)

This analysis of Federal impacts on the urban residential sector focuses on: (1) the influence of Federal programs and policies on intermetropolitan population movements (migration from the North to the sunbelt); and (2) program and policy influences on the process of suburbanization (the flight of the affluent from central cities). Considered are Federal actions that impinge directly upon residential location decisions, as well as those which act indirectly, having their initial effects on local fiscal and economic development. Recent trends in population growth among urban areas and in population suburbanization are described. Numerous factors influencing migration and suburbanization are discussed, including local labor market conditions, environmental factors, changes in accessibility and differences in amenities and public services between cities and suburbs, and Federal policies regarding transportation programs, highway construction, housing subsidies, discrimination, and local level government. An extensive bibliography is provided. (Author/EB)

This report examines the relationship between federal programs and policies and urban economic development. It provides both a conceptual analysis of the relationships and a review of the theoretical and empirical literature relevant to assessing policy effects. It is one of several in a broad study that examined federal actions in relation to aspects of the urban economic, residential, and fiscal environment. The purpose of this study is to determine capabilities for analyzing the effects of federal policies on urban areas. For analytic simplicity, the urban economy is conceived of as having three distinct but interacting sectors: the private business sector, the residential sector, and the urban public sector. This view permits consideration of the subset of federal policies that act directly on each sector, the subset of outcomes relevant to that sector, and the interactions among sectors. In this report those federal policies that directly influence economic development are discussed. Alternative definitions of "urban" are developed. Economic development variables that measure the influence of federal policies are defined. The network of relationships between policies and economic development are outlined, and federal policies are categorized according to how they influence economic development. It is indicated that summarizing the effects of the broad array of federal policies on urban economic development presented a number of difficulties. First, definitive evidence is hard to find. Second, studies have not assessed the relative importance of different federal programs. Finally, the process of economic growth and development is complex, and it is difficult to measure the relative contribution of factors that determine development. Emphasis was placed upon the shifts in economic development among three types of urban geographical units: urban areas in different regions, central cities and suburbs, and urban areas of different types. (Author/AM)