This working paper, part of a project on the applicability of the French training system in the United States, argues that a systematic national commitment to midcareer worker retraining is necessary for American prosperity and international economic competitiveness. Although findings of the early human capital theorists demonstrated that an educated work force is more productive, the lower financial returns to college education and falling American rates of productivity growth have made more recent theorists question the worth of increased investment in general education. Theorists, however, have focused on education received in a traditional pattern. Much of the potential payoff to worker education is found not in formal education prior to entering the work force but rather in midcareer retraining to cope with technological changes, to prevent skill deterioration, to learn new skills for job promotion, and to facilitate forced job changes. The supply side of the market for retraining services suffers from relatively few bottlenecks; the demand side suffers from these market failures: externalities, cash flow, lack of information, and risk aversion. Current federal policy and programs reserved almost exclusively for special groups do not constitute an adequate public and private response for midcareer worker retraining. The French have developed an extensive institutional arrangement for mobilizing public and private resources for midcareer worker retraining. With certain modifications, such a system should be incorporated into the United States. (YLB)