The overall objective of this project is to develop a methodology to forecast the amount of revenue that could be raised by means of a training levy.
The aim of this report is to present the main findings of the literature review that
has been carried out for the purpose of this project, along with a methodology to evaluate the potential of private sector resources to invest in technical and vocational education and training (TVET) schemes. This qualitative analysis is also supplemented by some quantitative results to provide an estimate of the amount of resources that could be mobilized from the private sector for training purposes.
- Training levies are important tools to provide a pool of funding which can contribute to the advancement of human capital. The potential of this type of fiscal instrument is especially important for countries that have unstable public budgets.
- The review of the existing literature has pointed out that the vast majority of the research work undertaken has followed a qualitative approach. This is because of a lack of the statistical data that is required to conduct empirical analysis.
- UNESCO’s review of the literature has revealed that some pieces of research cover issues such as the general outcomes of training programmes, and the training that has been financed by means of a training levy in a particular sector. However, to the best of our knowledge there is no study that provides forecasts of the potential amount of resources that could be raised by this type of tax.
- In order to contribute to the existing body of knowledge, we propose a conceptual framework which shows how the amount of revenue raised will depend on the levy base and the rate at which the levy is set. However, there are other factors that could influence the final outcome achieved by the relevant levy, such as the economic and institutional context and the general conditions of the labour market.
Chosen excerpts by Job Market Monitor. Read the whole story at Funding skills development: the private sector contribution