A well-functioning labor market is dynamic. Workforce development refers to activities and institutions that enhance the skills and abilities of workers in order that they may be productive. In general, workforce development is focused on individuals, but it may be funded or provided by employers or the public sector. For incumbent workers, workforce development comprises skill enhancement or certification that will help individuals advance in their careers. For the unemployed or underemployed, workforce development may include skill development or involvement in labor exchange or job search assistance activities.

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Demand-Side Programs

The impetus for workforce development through on-the-job training or work experience may come from demand-side programs. Tax credits or other subsidies may be offered to employers to hire or train workers. Such incentives may be especially effective because they are employer-driven. Senior Economist Tim Bartik has written extensively on demand side programs.

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Employment Service & Public Training

The public sector invests considerable sums in workforce development through employment service and public training programs. The nation’s employment policy may be summarized as follows:

• Insure against involuntary job loss (unemployment insurance)
• Facilitate re-employment through a public labor exchange (employment service)
• Develop skills in individuals likely to be unable to become re-employed through training (public training)

Many staff members at the Upjohn Institute have conducted studies of the programmatic elements of this policy such as elements that reflect the JTPA, WIA, Trade Adjustment Assistance, or Employment Service.

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Occupational Skills

To be productive, workers must ply appropriate occupational skills. The skills needed to be successful in the workforce include employability skills as well as technical skills that may be developed through apprenticeship training or that may be certified by occupational licensing.

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On-the-Job Training

Skill development of workers is provided through On-the-Job Training (OJT). OJT may be funded by public sources through incumbent worker training, but most often it is provided by employers on the worksite.

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Regional Collaboration

Within the last few years, regional collaborations has emerged to facilitate workforce development. These partnerships have been formed out of the recognition that networking between multiple organizations may be able to provide workforce development services more effectively than any single organization can.