Three important human capital questions must be addressed by U.S. policy makers: What are the effects of employer-sponsored training? Do employers invest enough in employee training? and How will accelerating technological change affect the need for employer-sponsored training and for complementary investments in education? Four policy implications of research on labor market dynamics are as follows: (1) there is no clear empirical evidence to support either increases or reduction in incentives for employer-sponsored training, but if policy makers do decide to provide further incentives, they should examine incentives to employees as well as to employers; (2) public programs, especially public schools, must prepare a much larger share of new entrants for well-paid, higher-skilled jobs; (3) remedial education or further training may deal with the problem of high unemployment rates more effectively than creating new jobs; and (4) data should be collected systematically to allow for an analysis of the level and effectiveness of all types of human capital investments. The educational system must sharply reduce the proportion of graduates with poor qualifications. Coordination will be required among employers and educational institutions. Federal and state economic policies must address the basic problem which is that those workers with problems in finding new employment need to extend their education or training. (NLA)