07 Jun 2021

New EENEE Policy Brief on Adult Learning during Recessions

Do workers and firms take advantage of the lower opportunity cost of labour and invest in adult learning during recessions, in the hope of having higher skills when the economy will take up again? We investigate the relationship between adult learning and the business cycle in the EU-27 countries, using data from the European Labour Force Survey for the period 2005-2018. We define “training” as non-formal learning, and “adult learning” as a broader concept that includes both non-formal and formal learning.

We find that adult learning is not sensitive to the business cycle. Training, instead, is mildly counter-cyclical. There are important differences by employment status: for the employed, adult learning is a-cyclical, yet training is counter-cyclical. We estimate that a 1 per cent decline in GDP per capita increases participation in the training of the employed by 0.95 per cent. For the not employed, both training and adult learning are pro-cyclical, and hence decrease in recessions. We find that a 1 per cent decline in GDP per capita reduces training hours for the not employed by 1.47 per cent. Counter-cyclical training of the employed is consistent with the view of recessions as times of firm re-organisation. Pro-cyclical training and adult learning for the not employed suggests the presence of credit constraints preventing the investment in skills during recessions.