Abstract
In this paper the promotion of education and training, i.e. workers’ employability is examined in theoretical and
practical terms. The author highlights the phenomenon of under-investment in general and firm-specific
human capital, and argues that training is a risky investment. Due to market failures – characterized as the
prisoner’s dilemma, free-riding, hold up and liquidity constraints – the vocational training of adult
employees fails to reach the optimal level. It is argued that cooperation and agreements between the social
partners and the extension of collective labour agreements provide solutions to these market failures. In
decision-making and accounting practice not only private enterprises, but also national governments treat
education and training as consumption goods and not as investment goods. Some practical policy solutions
are suggested to treat education and training more like real investments and to bridge the gap between human
capital theory and accounting practice, and to improve the quality of decision-making relating to education
and training.
