case analysis of market failure and government intervention in adult training industry from an economist perspective
CASE ANALYSIS OF MARKET FAILURE AND GOVERNMENT INTERVENTION IN THE ADULT TRAINING INDUSTRY 1 EXECUTIVE SUMMARY This report seeks to identify the sources of market failure in adult training, as well as the importance of government intervention to correct this market in-equilibrium situation. Three categories for government intervention measures include direct & indirect government financial assistance schemes, regulations and special initiatives such as public awareness campaigns. Despite these efforts of intervention, there exist several theoretical and practical difficulties faced by the government, which are discussed in detail in this report. Drawing on the current government intervention for adult training in Singapore, the report further concludes with suggestions on how the government may facilitate and promote adult training in Singapore. ... 1 Purpose The purpose of this article is to ascertain the presence of market failure in the adult training industry, as well as to provide recommendations on the appropriate levels of government interventions, with reference made to the Singapore market. ... 2 Scope The scope of this writeup is limited to the analysis of the national level of adult training with references and comparisons made against other developed countries such as United States and Singapore. Adult training is defined as any form of structured training for the purpose of this report, and excludes pre-employment education. 3 BACKGROUND ON ADULT TRAINING INDUSTRY 3.1 Stakeholders within the Adult Training Industry The stakeholders within the adult training industry comprise individual, employers, training providers and the government. ... 2 Objectives of Adult Training 3. ... 1 The objectives of adult training are to achieve and maintain a highly skilled workforce. ¡°As firms and labor market change, some jobs become obsolete and new ones are created. ... 2 The benefits derived from adult training include increase in skills level of workforce and higher level of productivity for industries and the economy as a whole. ... 3 Even though there are significant benefits for adult training, the incidence of adult training remains low. On average just under 36% of adults, aged 25 ¨C 64 years in 11 selected countries, engaged in some form of training over the previous year. ... 4 Conversely, the supply of adult training courses from private training providers is dependent on the industry demand for relevant work skills.