Assessing incentives and risks in training decisions. A methodological note applied to the Uruguayan case

This article discusses training decisions using an approach that considers the wage gap and the probability of employability gap pre- and post training, taking the gains from these two elements as the key to the decision to undertake training. The application of this approach to the Uruguayan case, given the surprisingly low participation in public training programs suggests as a likely hypothesis that public training provision is not attractive enough for unskilled workers because of the limited benefits reported to potential trainees, even discounting for cash incentives to participate. Other explanations are not ruled out. A longterm policy recommendation is to strengthen basic education, as education and training seem complementary rather than substitutes.