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Returns to Apprenticeship Training in Austria: Evidence from Failed Firms

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  • Fersterer, Josef
  • Pischke, Jörn-Steffen
  • Winter-Ebmer, Rudolf

Abstract

Little is known about the payoffs to apprenticeship training in the German speaking countries for the participants. OLS estimates suggest that the returns are similar to those of other types of schooling. However, there is a lot of heterogeneity in the types 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 failed firms in Austria. When a firm fails, current apprentices cannot complete their training in this firm. Because 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 the firm failure therefore serves 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.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6387.

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Date of creation: Jul 2007
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Handle: RePEc:cpr:ceprdp:6387

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Keywords: ability bias; firm-based training; Human capital; returns to schooling;

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References

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Cited by:
  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).
  2. Jerome Adda & Christian Dustmann & Costas Meghir & Jean-Marc Robin, 2013. "Career Progression, Economic Downturns, and Skills," NBER Working Papers 18832, National Bureau of Economic Research, Inc.
  3. Lerman, Robert I., 2013. "Skill Development in Middle Level Occupations: The Role of Apprenticeship Training," IZA Policy Papers 61, Institute for the Study of Labor (IZA).
  4. Wößmann, Ludger & Hanushek, Eric A. & Zhang, Lei, 2012. "General Education, Vocational Education, and Labor-Market Outcomes over the Life-Cycle," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62070, Verein für Socialpolitik / German Economic Association.
  5. Kathrin Goeggel & Thomas Zwick, 2011. "Heterogeneous Wage Effects of Apprenticeship Training," Economics of Education Working Paper Series 0062, University of Zurich, Institute for Strategy and Business Economics (ISU).
  6. 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).

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