Institute for Research in Economic and Fiscal issues

IREF Europe - Institute for Research in Economic and Fiscal issues

Fiscal competition
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Professional Training Reform: A New Financial System

The “Personal Professional Training Account” is one of the most interesting measures taken in the reform of the professional training sector announced by President François Hollande on March 4th in Blois, France. It is the first time that the “voucher principle” would be applied for the use of public money by workers. Yet, the way the measure is to be implemented may not be satisfactory to allow a real free choice.

First of all, how does the “Personal Professional Training Account” work? Each worker and jobseeker will have one. The “capital” of this account will be made of a number of hours, between 20 and 120 hours that could be used each year. Workers can use their account at any time during their professional life in the certified training center of their choice. As a result “the money follows the worker”, as it is for vouchers in Sweden. About 32 million people will benefit from this measure.

Yet, there are two problems.

First, there are uncertainties about the real cost of this measure . The professional training sector is financed mainly by public money. It amounts to 32 billion euros each year and it is hoped by the Government that the “Personal Professional Training Account” spending would not change dramatically from what it is now. But in a crisis context of high unemployment, more workers may choose to either strengthen their training or get a new one for a career change. It could easily double the professional training budget, reaching 60 billion euros. That is risk the Government is aware of.

Second, the “Personal Professional Training Account” will actually be implemented in a heavy Government-controlled sector . If now there are 55.000 private training centers, there is only one public training organization, the AFPA (Association for Professional Training for Adults). President François Hollande has announced that 55.000 training centers are too much and this number will be dramatically reduced. More important, the AFPA received from the Government a 430 million euros budget for the next four years in order to strengthen its training offers and create new ones. It is clear that Government will reduce the actual workers’ choices so that they rather go in the AFPA’s training centers. Therefore, it seems clear that, for the Government, the best way to avoid more spending is to reduce private competition and control training centers. If this is the case, the potential advantages of the “Personal Professional Training Account” would be several hampered.

To be followed...

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