Why Do Firms Train Apprentices? The Net Cost Puzzle Reconsidered

This paper investigates the short-term costs and benefits of apprenticeship training in Germany. It calls into question the popular stylised fact that apprenticeship training always leads to net costs during the apprenticeship period. We analyse the impact of the proportion of different occupational groups of apprentices on firm performance. We use representative matched employer?employee panel data that allow us to correct for different sources of estimation bias. We show that the proportion of apprentices in trade, commercial, craft and construction occupations has a direct positive impact on firm performance: the companies cover their training costs immediately. In contrast, companies with apprentices in the manufacturing occupations face net training costs during the apprenticeship period but gain by the long-term employment of its graduate apprentices. --apprenticeship training,performance,panel data estimation

Job shopping after vocational training? An empirical analysis of the transition from apprenticeship training to work

This econometric study deals with the question as to what extent apprentices after successfully completing their training stay with the firm where they have received their training and, if so, how long that job tenure holds. Determinants of both decisions can be seen from both the employer`s and the employee`s viewpoint. The firm is interested to employ this apprentices in order to collect the returns from its investment in their training which frequently is associated with net costs. On the other hand, the firm dismisses apprentices if training is viewed by the firm as a screening device or if apprentices are engaged in work for which, in terms of wages, they are too expensive afterwards. The young trained worker bases his or her decision to stay or to leave on considerations such as experimenting with several jobs ("job shopping"). The realization of such an experimenting may depend on the situation on the labour market. The empirical part uses individual employee data covering the time period 1980 to 1991 in West Germany and is based on a hazard rate model. --Training,Apprenticeship,Youth Unemployment,Matching

Returns to Apprenticeship Training in Austria: Evidence from Failed Firms

Little is known about the payoffs to apprenticeship training in the German speaking countries for theparticipants. OLS estimates suggest that the returns are similar to those of other types of schooling. However, there is a lot of heterogeneity in the types of apprenticeships offered, and institutional descriptions suggest that there might be an important element of selection in who obtains an apprenticeship, and what type. In order to overcome the resulting ability bias we estimate returns to apprenticeship training for apprentices in failed firms in Austria. When a firm fails, current apprentices cannot complete their training in this firm. Because apprentices will be at different stages in their apprenticeship at that time, the failure of a firm will manipulate the length of the apprenticeship period completed for some apprentices. The time to the firm failure therefore serves as an instrument for the length of the apprenticeship completed both at the original firm and at otherfirms. We find instrumental variables returns which are similar or larger than the OLS returns in our sample, indicating relatively little selection.Human capital, returns to schooling, firm-based training, ability bias

Training Intensity and First Labor Market Outcomes of Apprenticeship Graduates

The apprenticeship system is the most important source of formal post-secondary training in Germany. Using German register data - the IAB Employment Sample - we find that apprentices staying with their training firm after graduation have longer first-job durations but not higher wages than apprentices leaving the training firm. Retention rates, first job durations, and post-apprenticeship wages are all increasing functions of training intensity. Some implications for the ongoing debate as to why firms are willing to invest in general training are discussed.Training, wages, job-duration

Progression of apprentices to higher education

This report presents the findings of research undertaken for the Department for Business, Innovation and Skills (BIS) into the progression to higher education of advanced level apprentices over the past seven years. This is part of a longitudinal study whose first results were published in 2011 (Joslin & Smith, 2011)

Apprenticeship Training in Germany? Investment or Productivity Driven?

The German dual apprenticeship system came under pressure in recent years because enterprises were not willing to offer a sufficient number of apprenticeship positions. A frequently made argument is that the gap could be closed if more firms would be willing to incur net costs during the training period. This paper investigates for the first time whether German enterprises on average indeed incur net costs during the apprenticeship period, i.e. if the impact of an increase in the share of apprentices on contemporary profits is negative. The paper uses the representative linked employer-employee panel data of the IAB (LIAB) and takes into account possible endogeneity of training intensity and unobserved heterogeneity in the profit estimation by employing panel system GMM methods. An increase in the share of apprentices has no effect on profits. This can be interpreted as a first indication that most establishments in Germany do not invest more in apprentices than their productivity effects during the apprenticeship period. --

Apprenticeship training in Germany - investment or productivity driven?

"The German dual apprenticeship system has come under pressure in recent years because enterprises have not been willing to provide a sufficient number of apprenticeship positions. An argument that is frequently put forward is that the gap could be closed if more firms were willing to incur net costs during the training period. This paper investigates on the basis of representative data whether German enterprises do indeed incur net costs on average during the apprenticeship period, i.e. whether the impact of an increase in the share of apprentices on contemporary profits is negative. The paper uses the representative linked employer-employee panel data of the IAB (LIAB) and takes into account possible endogeneity of training intensity and unobserved heterogeneity in the profit estimation by employing panel system GMM methods. An increase in the share of apprentices has no effect on profits. This can be interpreted as a first indication that most establishments in Germany do not invest more in apprentices than their productivity effects during the apprenticeship period." (Author's abstract, IAB-Doku) ((en)) Additional Information Kurzfassung (deutsch) Executive summary (English)Ausbildungsverhalten, Ausbildungsbetrieb, Betrieb, betriebliche Berufsausbildung, Bildungsökonomie, Bildungsinvestitionen, Bildungsausgaben, Gewinn, Auszubildende, Produktivität, Personalpolitik, IAB-Linked-Employer-Employee-Datensatz

A survey of mathematics anxiety and mathematical resilience among existing apprentices

This research develops knowledge of the extent to which apprentices in the UK are affected by mathematics anxiety, including issues related to prior mathematics achievement, gender, and choice of apprenticeship, as well as outlining significant implications for both the supply and progression of STEM Apprentices. To what degree is mathematics anxiety an issue for Apprentices? • Mathematics anxiety has a noticeable impact on about 30% of the respondents. Another 19% have a tendency to be anxious but may not show such clear signs. • The degree of mathematics anxiety in apprentices is roughly equal to that in the rest of the population. Here it is known to both negatively impact on daily life (e.g., calculating a tip at a restaurant) and on formal education, “ultimately resulting in lower exposure to math, reduced practice using mathematics principles, and reduced workforce math competence”. (Brunye, 2013) • The high prevalence of mathematics anxiety in the overall apprentice population has a confounding influence on some statistically significant differences in mathematical anxiety associated with three key characteristics: prior mathematics achievement; gender; and STEM and nonSTEM apprenticeship study. In respect of these key characteristics our findings highlight that: o Mathematics anxiety is more prevalent among apprentices who have not yet gained Grade 2 mathematics. o Mathematics anxiety is more prevalent among female apprentices than male apprentices. o Females are more likely to be found on non-STEM apprenticeships than on STEM apprenticeships. o Mathematics anxiety is more prevalent among non-STEM apprentices than STEM apprentices. o One sixth of STEM apprentices experience their mind going blank when faced with mathematics. In this report, we argue that mathematics anxiety is affecting both recruitment and progress of STEM apprentices. What are the implications for the supply of STEM Apprentices? • Addressing mathematics anxiety in the pre- or early- apprentice population may be significant in increasing the pool of potential STEM apprentices in two ways: o Making progression possible: Increasing the number of pupils reaching higher levels of mathematics attainment, so increasing their potential for apprenticeship study, (particularly STEM apprenticeships) requiring higher levels of mathematics skill. o Making progression more probable: Increasing the number of pupils for whom mathematics anxiety is not a barrier when considering STEM apprenticeships as their next step. What are the implications for the success of STEM Apprentices? • For some apprentices, mathematics within this framework is significantly different from school mathematics. Mathematics anxiety is a significant problem on apprenticeships, STEM or nonSTEM, with harder mathematics than expected. • Previous research establishes that mathematics anxiety is highly likely to be hindering well-being and progress (for example, Brunye 2013). It is also established that purpose and utility makes mathematics more accessible to people who have previously been excluded from mathematics, and more so for females. • For many people, the problem “is only in maths”. We suggest that addressing mathematics anxiety could be significant to overall apprenticeship success and well-being and have positive impacts on both recruitment and progress for many apprentices