IDEAS home Printed from
   My bibliography  Save this paper

The effect of business cycle expectations on the German apprenticeship market: Estimating the impact of Covid-19


  • Samuel Muehlemann
  • Harald Pfeifer
  • Bernhard Wittek


A firm's expectation about the future business climate is an important determinant of the decision to train apprentices, because German firms typically train apprentices to either fill future skilled worker positions, or as a substitute for other types of labor. The current coronavirus crisis will have a strong and negative impact on the German economy according to the current estimates of the business climate in Germany (ifo Business Climate Index). To the extent that the training decision of a firm depends on its perception of the business climate, we expect a downward shift in the firm's demand for apprentices and consequently also a decrease in the equilibrium number of apprenticeship contracts. To assess the impact of changes in business climate expectations, we analyze German data on the apprenticeship market at the state-level and at the occupation-level within states from 2007 to 2019. We apply first-differences regressions to account for unobserved heterogeneity across states and occupations, allowing us to identify the association between changes in the ifo Business Climate Index and subsequent changes in the demand for apprentices, the number of new apprenticeship contracts, unfilled vacancies and unsuccessful applicants. We find that the favorable business climate in Germany in recent years led to a substantial increase in the number of unfilled vacancies. Thus, the apprenticeship market prior to the current crisis can be characterized by excess demand for apprentices (although there are matching problems in some states, with both a high share of unfilled vacancies and a high share of unsuccessful applicants). Taking into account the most recent business climate data up to May 2020, we estimate that the coronavirus-related decrease in firms' expectations about the business climate can be associated with a predicted 9.1% decrease in firm demand for apprentices and a 6.8% decrease in the number of new apprenticeship positions in Germany in 2020 (34,700 apprenticeship contracts; 95% confidence interval: +/- 8,800).

Suggested Citation

  • Samuel Muehlemann & Harald Pfeifer & Bernhard Wittek, 2020. "The effect of business cycle expectations on the German apprenticeship market: Estimating the impact of Covid-19," Economics of Education Working Paper Series 0171, University of Zurich, Department of Business Administration (IBW).
  • Handle: RePEc:iso:educat:0171

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    More about this item


    Apprenticeship market; Covid-19; coronavirus; business cycle;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iso:educat:0171. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sara Brunner). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.