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The Promise of Workplace Training for Non-College Bound Youth: Theory and Evidence from German Apprenticeship

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Author Info
Damon Clark
René Fahr
Abstract

This paper assesses the potential of `workplace training' with reference to German Apprenticeship. When occupational matching is important, we derive conditions under which firms provide `optimal' training packages. Since the German system broadly meets these conditions, we evaluate the effectiveness of apprenticeship using a large administrative dataset. We find returns to apprenticeship for even the lowest ability school-leavers comparable to standard estimates of the return to school, and show that training is transferable across a wide range of occupations, such as a one-digit occupation group. We conclude that the positive experience with German Apprenticeship Training may guide the design of similar policies in other countries.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0518.

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Date of creation: Mar 2002
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Handle: RePEc:cep:cepdps:dp0518

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Related research
Keywords: German Apprenticeship Training; Human Capital; Occupational Mobility; Wages.;

Find related papers by JEL classification:
C29 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Other
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion

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  1. Miller, Robert A, 1984. "Job Matching and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 1086-120, December. [Downloadable!] (restricted)
  2. Laurie J. Bassi & Jens Ludwig, 2000. "School-to-work programs in the United States: A multi-firm case study of training, benefits, and costs," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 53(2), pages 219-239, January.
  3. Dietmar Harhoff & Thomas J. Kane, 1993. "Financing Apprenticeship Training: Evidence from Germany," NBER Working Papers 4557, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Scoones, David, 2000. "Matching and competition for human capital," Labour Economics, Elsevier, vol. 7(2), pages 135-152, March. [Downloadable!] (restricted)
  5. Chang, Chun & Wang, Yijiang, 1996. "Human Capital Investment under Asymmetric Information: The Pigovian Conjecture Revisited," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 505-19, July. [Downloadable!] (restricted)
  6. Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
  7. McCall, Brian P, 1990. "Occupational Matching: A Test of Sorts," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 45-69, February. [Downloadable!] (restricted)
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  8. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-62, October. [Downloadable!] (restricted)
  9. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier. [Downloadable!] (restricted)
  10. Bender, Stefan & Haas, Anette & Klose, Christoph, 2000. "IAB Employment Subsample 1975-1995 Opportunities for Analysis Provided by the Anonymised Subsample," IZA Discussion Papers 117, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Topel, Robert H & Ward, Michael P, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 439-79, May. [Downloadable!] (restricted)
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  12. Steedman, Hilary, 1993. "The Economics of Youth Training in Germany," Economic Journal, Royal Economic Society, vol. 103(420), pages 1279-91, September. [Downloadable!] (restricted)
  13. Krueger, Alan & Rouse, Cecilia, 1998. "The Effect of Workplace Education on Earnings, Turnover, and Job Performance," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 61-94, January. [Downloadable!] (restricted)
  14. Daron Acemoglu & Jörn-Steffen Pischke, 1998. "Why Do Firms Train? Theory And Evidence," The Quarterly Journal of Economics, MIT Press, vol. 113(1), pages 78-118, February. [Downloadable!] (restricted)
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