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Apprentice pay in Britain, Germany and Switzerland: institutions, market forces, market power

Author

Listed:
  • Paul Ryan

    (University of Cambridge)

  • Uschi Backes-Gellner

    () (Department of Business Administration, University of Zurich)

  • Silvia Teuber

    () (Department of Business Administration, University of Zurich)

  • Karin Wagner

    (Hochschule für Technik und Wirtschaft Berlin)

Abstract

Although trainee pay is central to the economics of work-based training, institutionalists have paid it little attention, while economists typically assume that it is set by market clearing. We document large differences in the pay of metalworking apprentices in three countries: relative to the pay of skilled employees, it is high in Britain, middling in Germany, and low in Switzerland. Combining fieldwork evidence with national survey data, we associate apprentice pay with both institutional attributes and market forces: specifically, with trade union presence and goals, employer organisation, the contractual status of apprentices, the supply of eligible and interested young people, and public subsidies. Apprentice pay appears to have fallen in Britain and Germany as bargaining coverage has declined.

Suggested Citation

  • Paul Ryan & Uschi Backes-Gellner & Silvia Teuber & Karin Wagner, 2012. "Apprentice pay in Britain, Germany and Switzerland: institutions, market forces, market power," Economics of Education Working Paper Series 0075, University of Zurich, Department of Business Administration (IBW).
  • Handle: RePEc:iso:educat:0075
    as

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    File URL: http://repec.business.uzh.ch/RePEc/iso/leadinghouse/0075_lhwpaper.pdf
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    References listed on IDEAS

    as
    1. Wolter, Stefan C. & Ryan, Paul, 2011. "Apprenticeship," Handbook of the Economics of Education, Elsevier.
    2. Jens Mohrenweiser & Uschi Backes-Gellner, 2008. "Apprenticeship Training – What for? Investment in Human Capital or Substitute for Cheap Labour?," Economics of Education Working Paper Series 0017, University of Zurich, Department of Business Administration (IBW).
    3. Stevens, Margaret, 1999. "Human Capital Theory and UK Vocational Training Policy," Oxford Review of Economic Policy, Oxford University Press, vol. 15(1), pages 16-32, Spring.
    4. Mühlemann, Samuel & Wolter, Stefan C. & Wüest, Adrian, 2009. "Apprenticeship Training and the Business Cycle," IZA Discussion Papers 4460, Institute for the Study of Labor (IZA).
    5. Regina Dionisius & Samuel Muehlemann & Harald Pfeifer & Günter Walden & Felix Wenzelmann & Stefan C. Wolter, 2009. "Costs and Benefits of Apprenticeship Training. A Comparison of Germany and Switzerland," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 55(1), pages 7-37.
    6. Addison, John T. & Bryson, Alex & Teixeira, Paulino & Pahnke, André & Bellmann, Lutz, 2010. "The State of Collective Bargaining and Worker Representation in Germany: The Erosion Continues," IZA Discussion Papers 5030, Institute for the Study of Labor (IZA).
    7. Samuel Muehlemann & Paul Ryan & Stefan C. Wolter, 2013. "Monopsony Power, Pay Structure, and Training," ILR Review, Cornell University, ILR School, vol. 66(5), pages 1097-1114, October.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Mohrenweiser, Jens & Wydra-Sommaggio, Gaby & Zwick, Thomas, 2014. "Adverse Selection and Information Advantages of Training Firms," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100525, Verein für Socialpolitik / German Economic Association.
    2. Fries, Jan & Göbel, Christian & Maier, Michael F., 2013. "Do employment subsidies reduce early apprenticeship dropout?," ZEW Discussion Papers 13-053, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Mohrenweiser, Jens & Zwick, Thomas & Backes-Gellner, Uschi, 2013. "Poaching and firm-sponsored training: First clean evidence," ZEW Discussion Papers 13-037, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Uschi Backes-Gellner, 2014. "Benefits of Apprenticeship Training and Recent Challenges - Empirical Results and Lessons from Switzerland and Germany," Economics of Education Working Paper Series 0097, University of Zurich, Department of Business Administration (IBW).
    5. Mohrenweiser, Jens & Wydra-Sommaggio, Gaby & Zwick, Thomas, 2015. "Work-related ability as source of information advantages of training employers," ZEW Discussion Papers 15-057, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    6. Jens Mohrenweiser & Gabriele Wydra-Somaggio & Thomas Zwick, 2017. "Information Advantages of Training Employers Despite Credible Training Certificates," Economics of Education Working Paper Series 0121, University of Zurich, Department of Business Administration (IBW), revised Apr 2017.

    More about this item

    Keywords

    Apprenticeship training; pay structure; trade unions; employers’ associations; collective bargaining; training contracts; young workers; public subsidy;

    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
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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