Chart 1. Training and employment rates are correlated
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Training incidence alone can explain up to 40% of the cross-country variation in employment rates. Although care must be taken in interpreting these results since they may also reflect correlation between training and education, on the one hand, and education and labour market performance, on the other, this relationship remain significant even after controlling for the effects of education, GDP growth and institutions. This finding is essentially due to the robust correlation between human capital investments and labour force participation, which may reflect the fact that such investments make work more attractive because either expected wages are higher or employment prospects better than in the absence of training. The chart lends some support to the idea that appropriate training policies can be an important component of a general strategy geared at increasing labour force participation and reducing non-employment traps.