Study On The Mechanism Of Government Subsidy To Vocational Training

The shortage of skilled workforce became a serious issue in many industrializedcountries. United States, Germany, France and other European countries in therecruitment of technicians have been confronted with such problems. The structure ofskilled workers is irrational in China; especially the low proportion of senior andsenior-above technicians has become the bottleneck of economic development andindustrial upgrading.In China, there are many objective limitations in the private investment ofvocational training industry, such as the high cost of vocational training schools, thelow affordability of trainees and low return on investment. At same time, thevocational training industry is in a wave of privatization reform，and supporting it asthe public product by the government is an inevitable trend. As the key policy-maker,the government launched a series of subsidy policies. After that, how to innovatecontrol methods, how to prevent the subsidy policies failed in the training market, and"market a little more or a little more government" become questions which worth topay attention and be analyzed.Since1998, Shanghai made the policy of "government purchase training results"which was basis on the experience of Sweden and other Nordic countries. Afterundergone several changes and explorations, the policy develop to be accountable andlegalized. In this stage, the training subsidies appeared two characteristics gradually:First, training subsidies gradually moving towards personal and account. From2005,the policy of personal choice in the training with government subsidies had been trialrun. Individual workers can choose training programs and training institutionsautonomously, until2006, the policy of "establishment of vocational training personalsubsidy account" entered to the stage of implementation. The "establishment ofvocational training personal subsidy account" policy means Shanghai workers in thestatutory age can select to participate in the vocational training programs which ismarket needed and skill-based in qualified training institutions, and the government will provide a certain percentage of funds to be subsidies, the cost will write-off in itstraining personal account. Personal subsidy account makes the training subsides toindividuals directly, makes the mechanism of government purchase the results oftraining closer to the market demand and workers’ individual wishes, and achieves thatthe workers participate in training autonomously with their accounts.Until now, the Shanghai vocational training subsidy mechanism still has manyproblems, such as the gap between subsidy programs and the actual needs of themarket, the gap between evaluation methods, conditions of identification andtechnical upgrade requirements of subsidy project, the choice of subsidy trainingresources, unsatisfied training supervision, etc. This article is going to explore andsolve the exist problems, and provide recommendations to optimize Shanghaivocational training subsidy policy。This article consists of introduction and three parts. According the logical orderwhich including the elaborate background, theoretical foundation, the development ofthe current situation, questions, analysis of the problems and policy recommendations,to analyze the Shanghai vocational training subsidy mechanism and provideoptimization policy suggestions.The introduction is the opening of this paper. The introduction mainly elaboratesthe background and significance of the selected topic, and states the related researchpresent situation and explains the research idea and methods of this paper.The first part starts with the meaning and basic characteristics of vocational training.It states the background and basic theory of vocational training subsidy. Trough theanalysis of successful cases of foreign vocational training, it helps to summarize theenlightenment for Shanghai Government, and explore effective strategies gradually.The next part is the description of the development process and the current situation ofShanghai vocational training subsidy mechanism. And including the analysis fromseveral dimensions which including the scope of subsidy, subsidy standards, targetedbeneficiaries, implementing agencies and costs write off. At the same time, to summarize the existing problems and analyze the reasons which caused theseproblems.The second part is focus on the recommendations of how to optimize the currentsituation of the Shanghai vocational training subsidy mechanism. The content in thispart is about: Firstly, how to put in the training fund, and the principles of how to usethe various types of funds appropriately. Secondly, improve the expansion of subsidytraining policy system. Thirdly, how the determine of subsidy directory be consistentwith the actual needs of the society. Fourthly, excite the enthusiasm of enterprises, andimprove the vocational training system. Fifthly, how to strengthen the training andguidance services for workers. These aspects of countermeasures make thedevelopment of Shanghai subsidy training industry be more healthy and stable.