Why do firms train apprentices? The net cost puzzle reconsidered

This paper analyses the impact of increasing the share of apprentices at the cost of the share of unskilled or semi-skilled employees on establishment performance. We use representative matched employer–employee panel data and correct for estimation biases. We show that an increase of the apprentice share in trade, commercial, craft or construction occupations has a positive impact on establishment performance. Establishments that increase the apprentice share in manufacturing occupations face a negative impact on performance, however. These results shed a new light on the stylised fact that apprenticeship training always leads to net costs during the apprenticeship period in Germany: we argue that establishments only hire apprentices at a cost if their skills are relatively specific, their retention rate is high and skilled employees are hard to hire

Challenges to the implementation of dual apprenticenships in OECD countries: A literature review

The good economic performance and low levels of youth unemployment in countries with dual vocational education and training (VET) systems have provided good arguments to the advocates of dual apprenticeships as a global role model. Many governments in the Global North have started to show great interest in adopting dual apprenticeships in their own national contexts with the aim of improving the employability of young adults and smoothening transitions from education to work. However, evaluation studies have demonstrated that the transfer of these international good practices to different local contexts is quite problematic, making necessary to understand how different designs of dual apprenticeship programmes interact with the social and economic contexts in which they are implemented, and how social actors react to these interventions. This literature review has systematised international evidence on some of the challenges and dilemmas that governments in OECD countries face when they want to implement large-scale dual apprenticeship programmes. We suggest that the main challenge they face is to make dual apprenticeships attractive to both employers and students. We conclude that the difficulty of reconciling these two goals is one of the main reasons for most of these interventions to remain as small-scale innovations and not reaching the systemic level