Employer-sponsored training in stabilisation and growth policy perspectives

In Europe, accounting standards prevent larger expenditures on employer-sponsored training from being treated as investments. Using Sweden as example, we discuss two consequences for training. <p> First, the timing: training will be conducted when income is large enough for training costs to be deducted without loss. This is more often possible during booms than recessions, providing a stabilisation policy dimension to training. <p> Second, the volume: the training opportunity cost (foregone production) is largest during booms. Hence, training tends to be smaller than if conducted during downturns, possibly limiting growth. <p> We formulate two proposals that can make training more counter-cyclical and increase the amount of training.