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Returns to Apprenticeship Training in Austria: Evidence from Failed Firms

  • Fersterer, Josef

    (Landesstatistischer Dienst Salzburg)

  • Pischke, Jörn-Steffen

    (London School of Economics)

  • Winter-Ebmer, Rudolf

    (University of Linz and Institute for Advanced Studies, Vienna)

Little is known about the payoffs to apprenticeship training in the German speaking countries for the participants. There is a lot of heterogeneity in the types of apprenticeships offered, and there might be an important element of selection in who obtains an apprenticeship, and what type. To overcome the resulting ability bias we estimate returns to apprenticeship 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, the failure of a firm will manipulate the length of the apprenticeship period completed for some apprentices. The time to 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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File URL: http://www.ihs.ac.at/publications/eco/es-215.pdf
File Function: First version, 2007
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Paper provided by Institute for Advanced Studies in its series Economics Series with number 215.

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Length: 25 pages
Date of creation: Jul 2007
Date of revision:
Handle: RePEc:ihs:ihsesp:215
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