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Working Papers | December 14, 2020

Understanding the Incumbent Worker’s Decision to Train: The Challenges Facing Less- Educated Workers

Axelle Clochard, George Westerman

WP09-2020

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Labor economists estimate that more than two million manufacturing jobs will go unfilled in the next decade (Deloitte and the Manufacturing Institute, 2018). This number will be driven not only by the retirement of a rapidly aging workforce, but also by the adoption of new technologies as the fourth industrial revolution continues to transform manufacturing. Crucially, the shift to more automation and digitization will demand a different set of skills from the manufacturing workforce (Autor, Mindell, and Reynolds 2019, 2020).

Recruiting youth into the manufacturing workforce will not be sufficient to address this labor shortage. It will be just as critical to develop incumbent workers, a population not usually targeted by an American training system focused largely on the young and the unemployed. To this end, several models for upskilling existing workers have emerged, from public-private partnerships to schools and tech companies developing online manufacturing programs and certifications. Massachusetts alone has invested millions of dollars in workforce development programs to train the next generation of manufacturing workers (Massachusetts EOHED, 2019). Still, manufacturing companies most commonly choose to upskill employees through on-the-job training (PWC, 2016).

However, there is reason to doubt that manufacturing workers are sold on the benefits of training, particularly if they have lower levels of educational attainment. Starting near the end of the last century, the manufacturing worker became the emblem of the displaced worker, simultaneously affected by de-unionization, globalization, and automation. To this day, the salience of this image affects not only the recruitment of new workers but arguably the motivation for incumbents to invest in their careers. Just as new entrants might not perceive manufacturing as an attractive career, so incumbent workers might not believe that theirs is a growing industry. Although advanced manufacturing positions promise higher pay and better working conditions, the share of manufacturing jobs going to college graduates has increased drastically from 21% in 1991 to 40% in 2019 (Hufford, 2019). Thus, less-educated incumbent workers might not consider these jobs to be theirs for the taking and may not see the training investment as worthwhile. Similar beliefs may affect less-educated workers in other industries that are undergoing skill-biased technical change.

Adding to this, training opportunities tend to be biased away from less-educated workers. For reasons that are hard to disentangle from this bias, those who have higher rates of training tend to be more educated, more skilled, younger, and working in white-collar jobs (for US evidence: Leuven and Oosterbeek, 1999; Desjardins et al., 2006; Cronen et al., 2016; Osterman, 2020; for European evidence: Brunello, 2001; Rubenson, 2007; Albert et al., 2010; Fouarge et al., 2013; Gorlitz and Tamm, 2016; Ruhose et al., 2019).

And yet, beyond simple explanations such as cost and convenience, we know little about what motivates or dissuades less-educated workers from participating in training when the opportunity arises. As such, this paper asks, what are the factors that influence the incumbent worker’s decision to participate, or not participate, in work-related training? Developing a coherent theory around the expectations related to training, and how these might vary when it comes to the less-educated worker, would allow employers, policymakers, and workers to optimize the value of the training investment.

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