Apprenticeship Training – What for? Investment in Human Capital or Substitute for Cheap Labour?
Apprenticeship training in Germany is generally considered to be an investment of companies into the human capital of their apprentices. This view is mainly based on the German cost benefit studies which testify training firms high net costs for their apprenticeships, but these results have not been reconfirmed by other types of data or methods. We show that motiva-tions for apprenticeship training are not homogeneous: some firms follow an investment strategy and others follow a substitution strategy. We derive an empirical method to identify different training strategies which can be used with publicly available company data. Accord-ing to our classification, we find that in Germany 18.5 percent of all companies follow a sub-stitution strategy and 43.75 percent to follow an investment strategy; the rest is mixed or un-determined. In a second step we estimate the determinants for a substitution strategy. We find sizeable differences between sectors with different skill requirements and between firms’ cov-erage of industrial relations.
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