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Documents in EconStor mayDownload this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp08019.pdf sources of estimation bias and reversed causality. Our paper shows that it is necessary to discriminate between different groups of occupations when assessing the costs and benefits of apprenticeship training. In particular, we find that the share of apprentices in trade, commercial, craft and construction occupations has a positive impact on contemporary gross profits and the apprentices are substitutes for unskilled or semi-skilled workers. In contrast, an increase in the share of apprentices in the manufacturing occupations reduces contemporary gross profits.This means that enterprises offering apprenticeships in manufacturing occupations do not cover their training costs during the apprenticeship period. The apprenticeship training rather is a human capital investment. This paper demonstrates the efficiency of the German apprenticeship system: it allows companies to provide general and occupation-specific skills in highly specified occupations such as manufacturing. Otherwise, it offers cost-neutral apprenticeships in occupations where skills are more general and the mobility is higher, such as commercial or trade occupations. ABSTRACT 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.
WHY DO FIRMS TRAIN APPRENT...