Government Policies to Induce Efficient Retraining Decisions.

by Velma Montoya Thompson


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Discusses the government's role in retraining unemployed workers during nonrecession periods. Two kinds of deviations from the ideal competitive world of economics are considered. Each deviation leads to economically inefficient retraining decisions and calls for a special kind of government policy to induce efficient retraining decisions. The first deviation supports the suggestion that the government extend unemployment compensation to recently unemployed men and women who retrain rather than search to gain new employment. Improving the allocation between search and retraining has the added feature of reducing the unemployment rate as conventionally measured in the United States. The second deviation supports the government's current subsidization of college-level retraining for middle-class women who are considering entering the labor force after rearing their children. (For the Compendium entitled "American Women Workers in a Full Employment Economy," to be published by the Joint Economic Committee of the U.S. Congress.) 22 pp. Bibliog.

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