Financial Incentives for Steering Education and Training

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The present report examines how governments use financial incentives to promote a better alignment between labour market needs, on the one hand, and the supply of skills, on the other. In doing so, it identifies: i) innovative models that countries may be interested in learning from; ii) best practice in the design and use of financial incentives; iii) framework conditions for their effective use; and iv) limitations and risks in the use of financial incentives.



Key findings

Globalisation, technological progress and demographic change are having a profound impact on the skills needed in the labour market. As a general trend, the demand for skilled workers is increasing and additional investments in formal education as well as in training and retraining for workers are therefore required (European Commission, 2010). But the mega-trends are also driving important structural changes. It will therefore not be enough just to invest in more skills – it will be equally important to invest in the right type of skills (European Commission, 2016).


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