Retraining at Work: Can On-the-Job Training Subsidies Prepare Firms and Workers for Disruption?
Denmark has historically provided generous subsidies for on-the-job training of workers. The adult vocational training program (“Arbejdsmarkedsuddannelser (AMU)”) consists of around 3,000 courses targeting low and mid skilled workers to keep their skill set up to speed with globalization and new technologies. A stated goal of the program is to “solve labor market restructuring and adaptation problems in accordance with the needs on the labor market in a short and a long term perspective” (Danish Ministry of Education, 2018). Do the training subsidies deliver on this objective? Can adult vocational training help an economy adapt to disruption caused by globalization or new technologies, or are the programs merely subsidies to firms based on idiosyncratic needs and preferences? This research project will produce new evidence to inform the optimal design of retraining policies.