Devolution of employment and training policy: the case of older workers

The case for the devolution of employment and training programs has traditionally been based on the supply side argument that state and local governments are in the best position to assess the training needs of their disadvantaged workers. We provide a different perspective by focusing on the demand side of the labor market and the link between aiding older workers and fostering economic growth. We illustrate the importance of this focus by examining the labor market in Massachusetts, where the full employment economy of the late 1990s resulted in serious labor supply bottlenecks. Older workers, whose ranks are growing rapidly, provide the largest known labor reserve for meeting these labor supply deficits in the next decade. Tapping this reserve, however, means improving skills, deferring retirement, bringing older persons back into the labor market, and increasing full-time employment. Massachusetts already has the policy tools needed to train older workers to fill emerging job needs, but these policies will need to be substantially upgraded and reoriented. Too little funding, an emphasis on short-term programs, lack of coordination among programs, weak linkages to the private sector, and the limited flexibility of human resources practices in both the private and public sectors have left both government programs and employers ill-prepared to utilize fully the older worker labor reserve.