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Download Manpower Training: Theory and Policy by Adrian Ziderman PDF

By Adrian Ziderman

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3 The time preference rate of the individual- the rate at which he is willing to exchange current consumption for future consumption may be mapped in by indifference curves of the usual type. The individual will attempt to reach the highest indifference curve attainable, in terms of tangency with the transformation curve TT. Two examples are shown. 3 (a) UoU o' the individual invests in training, forgoing current consumption ca, since over this range the return on this investment (slope of TT) exceeds the individual time preference rate (slope of indifference curve U0 U0); in period t + I, income is raised by bd in consequence.

12 for a clear exposition). 3 (a) Oa and Ob represent actual income in time periods t and t + I respectively. The humancapital investment opportunities open to the individual are depicted 34 by the transformation curve TT, which is the locus of points attainable as he sacrifices more and more consumption out of period t income for enhanced income in period t + 1. 3t.... d E b o I R I E b o - - - - - - - - - 1I - I I I o c o oS I I I ----1--------, I I I T I I I I I I I I I I c o Income (t), a Yt o e ega Income (tl, training Investment, borrowing training Investment (bl (a) FIG.

If training does fall short of the optimum, thus meriting state intervention, so the critics argue, it is because of imperfections in the loan market for the finance of general training (see Chapter 3); thus the Government's role should be directed towards the problem of trainee finance for general training. In sum, the Act should have been orientated towards the needs of individual trainees (or potential trainees), rather than towards the needs of firms. Yet such root-and-branch criticism of the Act, though essentially on the right lines, errs in taking a valid argument too far.

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