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So Similar and yet so Different: A Comparative Analysis of a Firm's Cost and Benefits of Apprenticeship Training in Austria and Switzerland

Author

Listed:
  • Luca Moretti
  • Martin Mayerl
  • Samuel Muehlemann
  • Peter Schlögl
  • Stefan C. Wolter

Abstract

The authors compare a firm’s costs and benefits of providing apprenticeship training in Austria and Switzerland, using two original micro data sets. While both countries share a number of similarities, including an extensive vocational education and training (VET) system, and a common border, there are some important institutional differences. On average, a Swiss firm generates a net profit of 3400 Euro per apprentice and per year of training, while an Austrian firm incurs net costs of 4200 Euro. Applying matching models, we find that this difference is largely driven by a higher relative apprentice pay in Austria, which in turn is associated with collective bargaining agreements and competition with alternative school-based VET pathways. However, Austrian firms can still generate a return on their training investment, partly due to wage subsidies, but mostly by retaining a high share of apprentices as skilled workers, and thereby save on future hiring costs.

Suggested Citation

  • Luca Moretti & Martin Mayerl & Samuel Muehlemann & Peter Schlögl & Stefan C. Wolter, 2017. "So Similar and yet so Different: A Comparative Analysis of a Firm's Cost and Benefits of Apprenticeship Training in Austria and Switzerland," CESifo Working Paper Series 6711, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_6711
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    References listed on IDEAS

    as
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    Cited by:

    1. Kuhn, Andreas & Schweri, Jürg & Wolter, Stefan C., 2019. "Local Norms Describing the Role of the State and the Private Provision of Training," IZA Discussion Papers 12159, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    apprenticeship training; cost-benefit analysis; initial VET; hiring costs;

    JEL classification:

    • 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
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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