California's Employment Training Panel Program (ETP), the largest state-funded customized training program for incumbent workers in the nation, has had a positive impact on the economy of California, and its success has policy implications for other state programs. The impact of ETP on trainees includes the following: they are more attached to the labor force after training; they have greater before-to-after earning increases than comparison groups even in a slowing economy; and they experience less unemployment and an increase in employment stability. Likewise, ETP provides companies with services they need to expand workforces and payrolls either by causing greater growth than expected, or because companies with growth potential choose to use ETP. Policy recommendations for states with incumbent-worker training programs include the following: (1) share governance between labor, management, and public representatives; (2) make sure that state investment generates additional training and does not simply replace existing training; (3) pay for performance; (4) subsidize training, but don't foot the whole bill; (5) target basic industries and threatened companies; (6) avoid exclusive training providers; and (7) focus on management reinforcement of training. Methodology recommendations for evaluators of programs are also made. (A short policy history of ETP is followed by a perspective on participants which discusses how individual workers, companies, and states decide to get involved with training. Contains 23 case studies, 27 figures, 24 tables, and 47 references.) (MO)