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Premature Apprenticeship Terminations: An Economic Analysis

Author

Listed:
  • Donata Bessey

    () (Institute for Strategy and Business Economics, University of Zurich)

  • Uschi Backes-Gellner

    () (Institute for Strategy and Business Economics, University of Zurich)

Abstract

This paper presents empirical evidence on premature terminations of apprenticeship contracts in Germany. Our novel approach uses human capital theory with a regional component as a clear-cut framework for the analysis. It derives testable hypotheses on individual decisions to finish an investment in human capital, namely, their apprenticeship training. Using a German data set, we find some evidence for the appropriateness of our theory, especially with respect to the short-term cost of an apprenticeship. Regional impact factors also seem to have a decisive impact on the decision to drop out from vocational training. We conclude that economic incentives, also long-term ones, seem to play a decisive role in individuals’ decisions whether to finish their training or not.

Suggested Citation

  • Donata Bessey & Uschi Backes-Gellner, 2007. "Premature Apprenticeship Terminations: An Economic Analysis," Economics of Education Working Paper Series 0002, University of Zurich, Department of Business Administration (IBW).
  • Handle: RePEc:iso:educat:0002
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    File URL: http://repec.business.uzh.ch/RePEc/iso/leadinghouse/0002_lhwpaper.pdf
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    References listed on IDEAS

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    1. Samuel Muehlemann & Stefan C. Wolter, 2006. "Regional Effects on Employer Provided Training: Evidence from Apprenticeship Training in Switzerland," CESifo Working Paper Series 1665, CESifo Group Munich.
    2. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 1-9.
    3. Tomas Korpi & Antje Mertens, 2003. "Training Systems and Labor Mobility: A Comparison between Germany and Sweden," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(4), pages 597-617, December.
    4. Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-1240, September.
    5. Regina T. Riphahn, 2002. "Residential location and youth unemployment: The economic geography of school-to-work transitions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 115-135.
    6. Giorgio Barba Navaretti & Daniele Checchi & Alessandro Turrini, 2003. "Adjusting Labor Demand: Multinational Versus National Firms: A Cross-European Analysis," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 708-719, 04/05.
    7. Wheeler, Christopher H, 2001. "Search, Sorting, and Urban Agglomeration," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 879-899, October.
    8. Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 439-479.
    9. Francesca Fabbri & Jonathan E. Haskel & Matthew J. Slaughter, 2003. "Does Nationality Of Ownership Matter For Labor Demands?," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 698-707, 04/05.
    10. Joshua Angrist & Eric Bettinger & Erik Bloom & Elizabeth King & Michael Kremer, 2002. "Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment," American Economic Review, American Economic Association, pages 1535-1558.
    11. David M. Cutler & Adriana Lleras-Muney, 2006. "Education and Health: Evaluating Theories and Evidence," NBER Working Papers 12352, National Bureau of Economic Research, Inc.
    12. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-338, May.
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    Cited by:

    1. Uschi Backes-Gellner & Donata Bessey & Kerstin Pull & Simone Tuor, 2008. "What Behavioural Economics Teaches Personnel Economics," Working Papers 0077, University of Zurich, Institute for Strategy and Business Economics (ISU).
    2. Dostie, Benoit, 2010. "A Competing Risks Analysis of the Determinants of Low Completion Rates in the Canadian Apprenticeship System," CLSSRN working papers clsrn_admin-2010-29, Vancouver School of Economics, revised 21 Oct 2010.

    More about this item

    Keywords

    Apprenticeship training; human capital; regional labor markets;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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