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The impact of a missing school graduation cohort on the training market

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  • Dorner, Matthias
  • Görlitz, Katja
  • Jahn, Elke J.

Abstract

This study analyzes whether the training market responds to a reduced supply of trainees by decreasing the number of hired trainees and increasing their wages based on administrative data. The empirical identification uses exogenous regional and time variation in the occurrence of a missing school graduation cohort that shifts the supply of potential trainees downwards. The results show that the missing cohort decreases new hires by 10 % and raises wages by 1 %. Further robustness results reveal that the opposite case of excess supply (that is caused by dual cohorts) increases hirings and decreases wages. Our results also document that high and low wage firms respond differently to the supply shocks. While only high wage firms stop hiring when labor supply decreases, it is the low wage firms who hire a larger number of trainees in case of excess supply.

Suggested Citation

  • Dorner, Matthias & Görlitz, Katja & Jahn, Elke J., 2024. "The impact of a missing school graduation cohort on the training market," Economics of Education Review, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:ecoedu:v:103:y:2024:i:c:s0272775724000748
    DOI: 10.1016/j.econedurev.2024.102580
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    More about this item

    Keywords

    Training wages; Hiring trainees; Missing cohort; High and low wage firms; Firm heterogeneity; Dual cohort;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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