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How Negative Labor Supply Shocks Affect Training in Firms: Lessons from Opening the Swiss-German Border

Author

Listed:
  • Neuber-Pohl, Caroline

    (BIBB)

  • Pregaldini, Damiano

    (University of Zurich)

  • Backes-Gellner, Uschi

    (University of Zurich)

  • Dummert, Sandra

    (Institute for Employment Research (IAB), Nuremberg)

  • Pfeifer, Harald

    (BIBB)

Abstract

By exploiting a labor market reform causing an outflow of German workers to Switzerland, we examine the effect of negative labor supply shocks on training in firms using the market for apprenticeships as an example. Analysis of administrative data reveals that the reform led to more apprentices in German firms despite a decrease in apprentice wages. This can be explained by a standard two-factor production model where firms substitute outflowing skilled workers with more apprentices; setting lower wages is possible because of a rising supply of apprentices owing to substantially improved employment prospects after border openings.

Suggested Citation

  • Neuber-Pohl, Caroline & Pregaldini, Damiano & Backes-Gellner, Uschi & Dummert, Sandra & Pfeifer, Harald, 2023. "How Negative Labor Supply Shocks Affect Training in Firms: Lessons from Opening the Swiss-German Border," IZA Discussion Papers 16652, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16652
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    More about this item

    Keywords

    negative labor supply shock; training effects after worker outflow; wage effects; training incentives; apprenticeship training supply and demand;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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