Skilling the unskilled – a question of incentives?

The sudden slump in the labour market of the 1990s made it necessary for Switzerland to alter its labour market policy, which from being almost exclusively passive became an active policy. Indeed a lack of suitable qualifications can be considered as one of the main factors prolonging the unemployment of those concerned, in Switzerland. Even so, the policy of relying on massive continuous education and retraining programmes as the most efficient solution to this problem needs to be called into question. For many years a majority of those who now find themselves unemployed neglected the option of seeing to their own continuous education needs. The reasons for this inactivity at the individual level may well lie in the lack of financial incentives. This in turn is the result of a wage structure that is still very much linked to years of service, with education‐related differences in wages being very slight.