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Why do German Firms Subsidize Apprenticeship Training?: Tests of the Asymmetric Information And Mobility Costs Explanation

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  • Damon Clark

Abstract

It is often observed that despite the famous prediction of Becker (1962) that firms will not pay for general training, German firms do in fact subsidize apprenticeship training. This paper examines two prominent solutions to this puzzle - "asymmetric information" and "mobility costs." Our tests do not support the asymmetric information hypothesis, and, while they provide evidence consistent with a simple mobility cost explanation, we argue that this hypothesis is deficient in a number of other respects.

Suggested Citation

  • Damon Clark, 2001. "Why do German Firms Subsidize Apprenticeship Training?: Tests of the Asymmetric Information And Mobility Costs Explanation," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 102-106.
    • Handle: RePEc:diw:diwvjh:70-10-15
    DOI: 10.3790/vjh.70.1.102
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    References listed on IDEAS

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    1. Thomas J. Kane & Dietmar Harhoff, 1997. "Is the German apprenticeship system a panacea for the U.S. labor market?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 10(2), pages 171-196.
    2. Gospel, Howard F., 1994. "Whatever happened to apprenticeship training? A British, American, Australian comparison," LSE Research Online Documents on Economics 20909, London School of Economics and Political Science, LSE Library.
    3. Howard Gospel, 1994. "Whatever Happened to Apprenticeship Training," CEP Discussion Papers dp0190, Centre for Economic Performance, LSE.
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    1. Boom, Anette, 2005. "Firms' investments in general training and the skilled labour market," Labour Economics, Elsevier, vol. 12(6), pages 781-805, December.
    2. Beckmann, Michael, 2002. "Lohnstrukturverzerrung und betriebliche Ausbildung : empirische Analyse des Acemoglu-Pischke-Modells mit Daten des IAB-Betriebspanels (Wage structure bias and company training : empirical analysis of ," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(2), pages 189-204.
    3. Rob Euwals & Rainer Winkelmann, 2004. "Training intensity and first labor market outcomes of apprenticeship graduates," International Journal of Manpower, Emerald Group Publishing Limited, vol. 25(5), pages 447-462, July.
    4. Beckmann, Michael, 2002. "Lohnstrukturverzerrung und betriebliche Ausbildung : empirische Analyse des Acemoglu-Pischke-Modells mit Daten des IAB-Betriebspanels (Wage structure bias and company training : empirical analysis of ," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(2), pages 189-204.
    5. Euwals, Rob & Winkelmann, Rainer, 2001. "Why Do Firms Train? Empirical Evidence on the First Labour Market Outcomes of Graduated Apprentices," IZA Discussion Papers 319, Institute of Labor Economics (IZA).

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