The effect of labor market regulations on training behavior and quality: the German labor market reform as a natural experiment
AbstractLabor market frictions are seen in many extensions of the classical human capital theory as a prerequisite for firms financing general training. The labor market reforms in Germany at the beginning of the millennium have therefore been seen by many as a danger to the firms’ willingness to support the apprenticeship training system. This paper analyzes the training strategies German firms deployed to cope with the greater labor market flexibility as a result of the labor market reform. Switzerland where no reforms had taken place serves as the counterfactual. The results show that firms successfully reduced the net-costs of training by involving apprentices in more work and reducing non-productive tasks, like practicing. Contrary to the widespread fear, this adapted training strategy resulted also in a substantial increase in work-related competencies and productivity of apprentices.
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Bibliographic InfoPaper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Economics of Education Working Paper Series with number 0083.
Length: 24 pages
Date of creation: Dec 2012
Date of revision:
Apprenticeship training; difference-in-differences matching estimator; cost-benefit; labor market reforms;
Find related papers by JEL classification:
- C0 - Mathematical and Quantitative Methods - - General
- I20 - Health, Education, and Welfare - - Education - - - General
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-01-07 (All new papers)
- NEP-HRM-2013-01-07 (Human Capital & Human Resource Management)
- NEP-LAB-2013-01-07 (Labour Economics)
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