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Returns to Apprenticeship Training in Austria: Evidence from Failed Firms

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Author Info
Josef Fersterer
Jörn-Steffen Pischke
Rudolf Winter-Ebmer

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Abstract

In the German-speaking countries, little is known about the payoffs to apprenticeship training for the participants. OLS estimates suggest that the returns are similar to those of other types of schooling. However, there is considerable heterogeneity in the quality 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 small Austrian firms which cease to operate. When a firm fails, current apprentices cannot complete their training in this firm. Since 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 firm failure can therefore serve as an instrument for the length of the apprenticeship completed both at the original firm and at other firms. We find instrumental variables returns which are similar or larger than the OLS returns in our sample, indicating relatively little selection. Copyright © The editors of the "Scandinavian Journal of Economics" 2008 .

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9442.2008.00559.x
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Publisher Info
Article provided by Blackwell Publishing in its journal Scandinavian Journal of Economics.

Volume (Year): 110 (2008)
Issue (Month): 4 (December)
Pages: 733-753
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Handle: RePEc:bla:scandj:v:110:y:2008:i:4:p:733-753

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Wolfgang Franz & Joachim Inkmann & Winfried Pohlmeier & Volker Zimmermann, 1997. "Young and Out in Germany: On the Youths' Chances of Labor Market Entrance in Germany," NBER Working Papers 6212, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. David G. Blanchflower & Richard B. Freeman, 2000. "Youth Employment and Joblessness in Advanced Countries," NBER Books, National Bureau of Economic Research, Inc, number blan00-1.
  3. Fersterer, Josef & Winter-Ebmer, Rudolf, 2003. "Smoking, discount rates, and returns to education," Economics of Education Review, Elsevier, vol. 22(6), pages 561-566, December. [Downloadable!] (restricted)
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  4. Gerard A. Pfann & Daniel S. Hamermesh, 2001. "Two-Sided Learning, Labor Turnover and Displacement," NBER Working Papers 8273, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Freeman, Richard & Schettkat, Ronald, 2001. "Skill Compression, Wage Differentials, and Employment: Germany vs the US," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 582-603, July.
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  1. Kathrin Goeggel & Thomas Zwick, 2009. "Good Occupation – Bad Occupation? The Quality of Apprenticeship Training," Economics of Education Working Paper Series 0045, University of Zurich, Institute for Strategy and Business Economics (ISU). [Downloadable!]
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  2. Christian Dustmann & Uta Schönberg, 2007. "Apprenticeship Training and Commitment to Training Provision," Economics of Education Working Paper Series 0032, University of Zurich, Institute for Strategy and Business Economics (ISU). [Downloadable!]
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