Mastering Math: A Gateway to Better Firms and Higher Earnings

This paper assesses the relevance of school leavers' math skills to secure apprenticeships with high-quality employers and influence their future earnings as skilled workers. Using representative linked student-employer-employee data for Germany, we find that school-leavers with better math grades end up in larger, higher-paying training firms. Moreover, we find that women tend to initially sort in lower-paying training firms, which contributes to the understanding of the observed skilled worker gender wage gap. Finally, exploiting exogenous variation in teacher math competencies across German states, we find that a one standard deviation improvement in math skills increases individual earnings by 40% on average in the first five years after training.