The accumulation of human capitalthrough the acquisition of knowledge and skills isrecognized as central for economic development.More-educated workers not only have better employmentopportunities, they earn more and have more stable andrewarding jobs. They are also more adaptable and mobile.Workers who acquire more skills make other workers andcapital more productive and, within the firm, theyfacilitate the adaptation, adoption, and ultimatelyinvention of new technologies. This is crucial for economicdiversification, productivity growth, and ultimately raisingthe living standards of living of the population. Thestructure of the note is as follows. First, it examines thedifferent types of market failures, and subsequently reviewsthe role that governments have played in training systemsaround the world. Finally it offers a set of proposals forreforming and improving these systems to improve labormarket outcomes.