Why Some Firms Train Apprentices and Many Others Do Not

Wolter, Stefan C.; Mühlemann, Samuel; Schweri, Jürg

doi:10.1111/j.1468-0475.2006.00155.x

Cited by 94 publications

(85 citation statements)

References 9 publications

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“…In contrast, empirical studies show that the concrete decision for apprenticeship efforts mainly depends on the company owner's individual cost-benefit-calculation (Wolter et al 2006). …”

Section: Literature and Theoretical Backgroundmentioning

confidence: 99%

“…Empirical studies show that apprentices' contributions to productivity during their apprenticeship period in most firms cover and even go beyond the costs of training (Wolter et al 2006). This means that the productivity of the apprentice covers the apprentice's wage, the trainer's wage, the acquisition and preservation costs for material, instruments and infrastructural facilities as well as for other costs.…”

Section: Literature and Theoretical Backgroundmentioning

confidence: 99%

“…This paper therefore tries to assess whether there are indeed net investment costs during the apprenticeship training -in other words, whether the impact of apprentice share on the contemporaneous profit of the firm before they graduate is negative. Beicht et al (2004) calculate that there are net costs of apprenticeship training between 30 and 70% of the total training costs in Germany while Wolter et al (2006) show that in the majority of Swiss firms with apprentice training, productivity is at least equal to apprentices' wages. The potential apprenticeship training costs of firms that do not offer that kind of training are markedly higher than the feasible productivity gain by apprenticeship training.…”

Section: Introductionmentioning

confidence: 99%

“…This means, however, that companies have to retrieve the positive net investment costs after the graduation of the apprentice. This might be a problem especially if the shares of the apprentices who stay at their training firms are low or whether the labour market situation does not allow to pay a lower wage for skilled employees trained in-house (Smits und Zwick 2004;Wolter et al. 2006).…”

Section: Introductionmentioning

confidence: 99%

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Apprenticeship Training in Germany - Investment or Productivity Driven?

Zwick

2007

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp07023.pdf Non Technical SummaryThe German dual apprenticeship system came under pressure in recent years because enterprises were not willing to offer a sufficient number of apprenticeship positions. A large theoretical literature argues that in Germany firms are willing to invest in apprenticeship training, i.e. to incur net costs during the apprenticeship period. On the basis of the specific institutional situation, firms have the opportunity to re-earn the net-costs after apprentices received their diploma and stayed in the firm. Important arguments are a high share of apprentices staying in firms, market power of firms and information asymmetries that allow firms to pay a wage below the productivity for "home-grown" skilled employees. It might be therefore argued that the gap on the apprenticeship market increased because the German firms are less willing to incur net apprenticeship costs (an indication for investment orientation) and instead increasingly try to cover the training costs already during the time before the apprentice got his or her diploma (an indication for productivity orientation). Until now there is no representative evidence on the investment versus productivity orientation of German firms when it comes to their decision to offer apprenticeships. So far only the net costs of specific training professions have been calculated on the basis of cross section interviews. Hereby training firms have been directly asked on their costs and benefits while non-training firms had to indicate their potential costs and benefits. This approach is more prone to measurement error than indirectly estimating costs and benefits on the basis of representative firm profit regressions. This paper, therefore, investigates for the first time if German enterprises on average indeed incur net costs during the apprenticeship period including data from firms with and without apprentices. This is done by calculating if the impact of (an increase in) the share of apprentices on contemporary net revenues minus wage costs is negative. A positive contemporaneous impact is interpreted as productivity orientation. If an increase in the share of apprentices decreases contemporaneous profits per head (and increases lagged profits per head), this is interpreted as investment orientation. The paper uses the representative linked employer-employee panel data of the IAB (LIAB) and takes into ...

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“…In contrast, empirical studies show that the concrete decision for apprenticeship efforts mainly depends on the company owner's individual cost-benefit-calculation (Wolter et al 2006). …”

Section: Literature and Theoretical Backgroundmentioning

confidence: 99%

Section: Literature and Theoretical Backgroundmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Apprenticeship Training in Germany - Investment or Productivity Driven?

Zwick

2007

SSRN Journal

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“…Indeed, empirical evidence for Switzerland shows that firms are able to recoup their investments by the end of training, as apprentice pay is sufficiently low so that on average, the productive contribution of apprentices at the workplace offsets a firm's training costs. Moreover, research using Swiss data shows that while this is true for firms that actually train apprentices, expected net training costs for non-training firms would be substantial, which explains why some firms train and many others do not (Wolter et al, 2006).…”

mentioning

confidence: 99%