Original Research

Participation of firms in the skills development levy system

GJ Lee
South African Journal of Economic and Management Sciences | Vol 7, No 2 | a1378 | DOI: https://doi.org/10.4102/sajems.v7i2.1378 | © 2004 GJ Lee | This work is licensed under CC Attribution 4.0
Submitted: 27 April 2004 | Published: 28 April 2004

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GJ Lee, Wits Business School, South Africa

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Skills development levies are increasingly being utilised to increase enterprise provided training in developing economies. South Africa is one such example. The impact of such incentive systems on the bottom-line of firms is a vital consideration in such programs. Particularly important are the economic conditions under which the incentive will stimulate participation by organisations. The transaction costs of participation must be taken into account: while a levy-grant system clearly creates a prima-facie incentive, it may be prohibitively expensive for some firms to enter the grant disbursement systems. Accordingly, through a simple model of the incentives for firms, the participation level of the firm under various types of levy systems is assessed. Non-monetary considerations are also considered. The implications for participation by firms, along with managerial and policy implications, are discussed. 


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