The effectiveness of Mississippi's policy of offering incentives to promote workplace training was examined through phone surveys of a sample of 101 of Mississippi's 2,617 manufacturing firms with 100-350 employees (47 of the 77 plants that have used Mississippi incentive programs and 54 plants that have not) and in-depth case studies of 4 plants. The study used a case-control approach and had a 97% response rate. Only 66% of firms not using state incentive programs reported having workers who lack basic skills, whereas 87% of firms using the incentives reported employing workers lacking basic skills. Seventy percent of the firms surveyed did not provide workplace education without state assistance even though 55% believed that all workers must be proficient in basic skills. Plants using state programs were more likely to report an increase in skills demands and attribute the change to new technology, changes in workplace organization, or increased quality standards. In many cases, plants knew nothing about Mississippi's workplace education policies. It was recommended that Mississippi's policymakers be more strategic in their thinking regarding policy design and recognize that plants that are under no immediate pressure to upgrade workers' skills are unlikely to respond to incentive programs. (Contains 54 references.) (MN)