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Returns to Apprenticeship Training in Austria: Evidence from Failed Firms

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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 Department of Economics, Johannes Kepler University Linz, Austria in its series Economics working papers with number 2007-14.

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Date of creation: Jul 2007
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Handle: RePEc:jku:econwp:2007_14

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

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Cited by:
  1. Eric A. Hanushek & Ludger Woessmann & Lei Zhang, 2011. "General Education, Vocational Education, and Labor-Market Outcomes over the Life-Cycle," NBER Working Papers 17504, National Bureau of Economic Research, Inc.
  2. 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).
  3. Jerome Adda & Christian Dustmann & Costas Meghir & Jean-Marc Robin, 2013. "Career Progression, Economic Downturns, and Skills," Cowles Foundation Discussion Papers 1889, Cowles Foundation for Research in Economics, Yale University.
  4. Matteo PICCHIO & Jan C. van OURS, 2011. "Retaining through Training: Even for Older Workers," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  5. 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).
  6. 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).
  7. 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).
  8. Hall, Caroline, 2013. "Does more general education reduce the risk of future unemployment? Evidence from labor market experiences during the Great Recession," Working Paper Series 2013:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  9. Jean-Marc Robin & Costas Meghir & Christian Dustmann & Jerome Adda, 2013. "Career Progression, Economic Downturns, and Skills," 2013 Meeting Papers 993, Society for Economic Dynamics.

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