Article in Journal

The draft training protection law: Effects and side effects

Herbert Hofmann, Christian Holzner, Sonja Munz
ifo Institut für Wirtschaftsforschung, München, 2004

ifo Schnelldienst, 2004, 57, Nr. 09, 18-22

According to various calculations, more training positions will be lacking in 2004 than was the case in 2003. Following the demands for closing the training gap, as many training positions should be provided as there are applicants. The training protection law envisions an annual examination of the training gap on 30 September by the government. If the number of the training positions reported nation-wide that are still vacant is not at least 15% more than the number of applicants that have not yet found positions, then, according to the draft legislation, every employer that did not achieve the necessary training rate of 7% of its employees, subject to social insurance contributions, will be levied a "training protection fee". Small employers with up to ten employees subject to social insurance contributions are exempted if the fee poses an unjustifiable hardship. Instead of recognising and supporting the involvement of businesses in training, the new law would use threats to force business to create the necessary training positions. This article attempts to assess the legislative proposal.

JEL Classification: J220

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ifo Institut für Wirtschaftsforschung, München, 2004