This report represents an initial effort to understand the complex education and job training system and the policy instruments (i.e., the funding and regulatory mechanisms) that drive it. The analysis focuses on the role of state governments in implementing federal policies in local communities, and in designing and implementing their own policies. Its major purpose is to provide a conceptual framework for understanding the different types of policy instruments used to promote education and training objectives, and the factors influencing how policies embodying different instruments are likely to be implemented in different local communities. It examines five education and training policy areas: secondary vocational education, postsecondary vocational education, Job Training Partnership Act programs, state-funded job training programs linked to economic development strategies, and welfare-to-work programs. Finally, it presents data from a fifty-state survey of work-related education and training policies and case studies of education and training institutions in eight local communities to illustrate the range of instruments used in each of the five policy areas.