IDEAS home Printed from https://ideas.repec.org/p/iso/educat/0238.html
   My bibliography  Save this paper

The Role of Vocational Training in Addressing Skilled Labor Shortages

Author

Listed:
  • Henrika Langen

Abstract

This study examines how regional and occupation-specific skilled labor shortages influence companies' involvement in apprenticeship training. It explores the relationship between skilled labor shortages and demand for apprentices, qualification requirements, new apprenticeship contracts, and premature contract terminations in Germany. Skilled labor shortages are measured using the ratio of unemployed skilled jobseekers to job vacancies and a skilled labor shortage indicator from the Federal Employment Agency. Involvement in apprenticeship training is measured using annual apprenticeship contract data. To estimate the relationship between skilled labor shortages and apprenticeship activities, the study uses a two-way fixed effects model and a robust difference-in-differences approach. The findings show that skilled labor shortages bring about higher demand for apprentices and more hires, with companies recruiting a larger share of apprentices with lower qualifications. However, the impact on premature contract terminations remains unclear. Additionally, the study reveals significant variation across occupations in how companies adjust apprenticeship practices.

Suggested Citation

  • Henrika Langen, 2025. "The Role of Vocational Training in Addressing Skilled Labor Shortages," Economics of Education Working Paper Series 0238, University of Zurich, Department of Business Administration (IBW).
    • Handle: RePEc:iso:educat:0238
    as

    Download full text from publisher

    File URL: http://repec.business.uzh.ch/RePEc/iso/leadinghouse/0238_lhwpaper.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Majumdar, Sumon, 2007. "Market conditions and worker training: How does it affect and whom?," Labour Economics, Elsevier, vol. 14(1), pages 1-23, January.
    2. Ay?egül ?ahin & Joseph Song & Giorgio Topa & Giovanni L. Violante, 2014. "Mismatch Unemployment," American Economic Review, American Economic Association, vol. 104(11), pages 3529-3564, November.
    3. Marc Blatter & Samuel Muehlemann & Samuel Schenker & Stefan C. Wolter, 2016. "Hiring costs for skilled workers and the supply of firm-provided training," Oxford Economic Papers, Oxford University Press, vol. 68(1), pages 238-257.
    4. Kroczek, Martin & Koch, Andreas, 2024. "The reaction of wages to skill shortage in nursing," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302406, Verein für Socialpolitik / German Economic Association.
    5. Timmins, Jason & Mason, Geoff & Mok, Penny & Nunns, Peter & Stevens, Philip, 2012. "To Make or Buy (Skills): An Analysis of Training Decisions Using Microdata," Occasional Papers 12/6, Ministry of Economic Development, New Zealand.
    6. Thomas Bolli & Guillaume Morlet, 2023. "Does human capital theory govern the relationship between training provision and the business cycle? Evidence from Switzerland," French Stata Users' Group Meetings 2023 26, Stata Users Group.
    7. Bertoni Marco & Brunello Giorgio, 2022. "Training during recessions: recent European evidence," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 12(1), pages 1-17, January.
    8. Muehlemann, Samuel & Wolter, Stefan C., 2011. "Firm-sponsored training and poaching externalities in regional labor markets," Regional Science and Urban Economics, Elsevier, vol. 41(6), pages 560-570.
    9. Stevens, Margaret, 1994. "An Investment Model for the Supply of Training by Employers," Economic Journal, Royal Economic Society, vol. 104(424), pages 556-570, May.
    10. Jens Horbach & Christian Rammer, 2022. "Skills shortage and innovation," Industry and Innovation, Taylor & Francis Journals, vol. 29(6), pages 734-759, July.
    11. Burstedde, Alexander & Flake, Regina & Jansen, Anika & Malin, Lydia & Risius, Paula & Seyda, Susanne & Schirner, Sebastian & Werner, Dirk, 2020. "Die Messung des Fachkräftemangels: Methodik und Ergebnisse aus der IW-Fachkräftedatenbank zur Bestimmung von Engpassberufen und zur Berechnung von Fachkräftelücken und anderen Indikatoren," IW-Reports 59/2020, Institut der deutschen Wirtschaft (IW) / German Economic Institute.
    12. Modestino, Alicia Sasser & Shoag, Daniel & Ballance, Joshua, 2016. "Downskilling: changes in employer skill requirements over the business cycle," Labour Economics, Elsevier, vol. 41(C), pages 333-347.
    13. Francis Green & David Ashton, 1992. "Skill Shortage and Skill Deficiency: A Critique," Work, Employment & Society, British Sociological Association, vol. 6(2), pages 287-301, June.
    14. Handel Michael J., 2024. "Labor Shortages: What Is the Problem?," Intereconomics: Review of European Economic Policy, Sciendo, vol. 59(3), pages 136-142.
    15. Seamus McGuinness & Konstantinos Pouliakas & Paul Redmond, 2018. "Skills Mismatch: Concepts, Measurement And Policy Approaches," Journal of Economic Surveys, Wiley Blackwell, vol. 32(4), pages 985-1015, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Harald Pfeifer & Uschi Backes-Gellner, 2017. "Another piece of the puzzle: Firms' investment in training as optimization of skills inventory," Economics of Education Working Paper Series 0136, University of Zurich, Department of Business Administration (IBW), revised Jun 2018.
    2. Samuel Muehlemann & Stefan Wolter, 2014. "Return on investment of apprenticeship systems for enterprises: Evidence from cost-benefit analyses," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-22, December.
    3. Oswald-Egg, Maria Esther & Siegenthaler, Michael, 2023. "Train drain? Access to foreign workers and firms’ provision of training," Labour Economics, Elsevier, vol. 85(C).
    4. Moretti, Luca & Mayerl, Martin & Mühlemann, Samuel & Schlögl, Peter & Wolter, Stefan C., 2017. "So Similar and Yet So Different: A Comparative Analysis of a Firm's Cost and Benefits of Apprenticeship Training in Austria and Switzerland," IZA Discussion Papers 11081, Institute of Labor Economics (IZA).
    5. Aepli, Manuel & Kuhn, Andreas & Schweri, Jürg, 2021. "Culture, norms, and the provision of training by employers: Evidence from the Swiss language border," Labour Economics, Elsevier, vol. 73(C).
    6. Stockinger, Bastian & Zwick, Thomas, 2016. "Apprentice Poaching in Regional Labor Markets," VfS Annual Conference 2016 (Augsburg): Demographic Change 145565, Verein für Socialpolitik / German Economic Association.
    7. Emilio Colombo & Alberto Marcato, 2021. "Skill Demand and Labour Market Concentration: Theory and Evidence from Italian Vacancies," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis2104, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).
    8. Marc Blatter & Samuel Muehlemann & Samuel Schenker & Stefan C. Wolter, 2016. "Hiring costs for skilled workers and the supply of firm-provided training," Oxford Economic Papers, Oxford University Press, vol. 68(1), pages 238-257.
    9. Berloffa, Gabriella & Piazzalunga, Daniela & Pieri, Fabio, 2024. "Firm Human Resource Practices and Educational Mismatch," IZA Discussion Papers 17424, Institute of Labor Economics (IZA).
    10. Pfann, Gerard & Muehlemann, Samuel & Pfeifer, Harald & Dietrich, Hans, 2018. "Supply Shocks in the Market for Apprenticeships: Evidence from a German High School Reform," CEPR Discussion Papers 12669, C.E.P.R. Discussion Papers.
    11. Robert E. Hall & Marianna Kudlyak, 2022. "Why Has the US Economy Recovered So Consistently from Every Recession in the Past 70 Years?," NBER Macroeconomics Annual, University of Chicago Press, vol. 36(1), pages 1-55.
    12. Pater, Robert & Szkola, Jaroslaw & Kozak, Marcin, 2019. "A method for measuring detailed demand for workers' competences," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-30.
    13. Wilson, Anna & Bajka, Scherwin M., 2024. "Competitor or complement? Swiss Training Firms’ Perspective on General Education," OSF Preprints h2wnm_v1, Center for Open Science.
    14. Dietz Daniel & Zwick Thomas, 2020. "Training in the Great Recession – Evidence from an Individual Perspective," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(4), pages 493-523, August.
    15. Aepli, Manuel & Mühlemann, Samuel & Pfeifer, Harald & Schweri, Jürg & Wenzelmann, Felix & Wolter, Stefan C., 2024. "The Impact of Hiring Costs for Skilled Workers on Apprenticeship Training: A Comparative Study," IZA Discussion Papers 16919, Institute of Labor Economics (IZA).
    16. Wilson, Anna & Bajka, Scherwin M., 2024. "Competitor or complement? Swiss Training Firms’ Perspective on General Education," OSF Preprints h2wnm, Center for Open Science.
    17. Wilson, Anna & Bajka, Scherwin M., 2024. "Skill provision concerns in the knowledge economy: training firms’ perspective," OSF Preprints qjpz5_v1, Center for Open Science.
    18. Muehlemann, Samuel & Dietrich, Hans & Pfann, Gerard & Pfeifer, Harald, 2022. "Supply Shocks in the Market for Apprenticeship Training," Economics of Education Review, Elsevier, vol. 86(C).
    19. Kuhn, Andreas & Schweri, Jürg & Wolter, Stefan C., 2022. "Local norms describing the role of the state and the private provision of training," European Journal of Political Economy, Elsevier, vol. 75(C).
    20. Luca Moretti & Martin Mayerl & Samuel Muehlemann & Peter Schloegl & Stefan C. Wolter, 2017. "So similar and yet so different: A comparative analysis of a firm's net costs and post-apprenticeship training benefits in Austria and Switzerland," Economics of Education Working Paper Series 0137, University of Zurich, Department of Business Administration (IBW), revised Apr 2018.

    More about this item

    Keywords

    Skilled Labor Shortages; Vocational Education and Training (VET); Apprenticeships;
    All these keywords.

    JEL classification:

    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

    Statistics

    Access and download statistics

    Corrections

    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:0238. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sara Brunner (email available below). General contact details of provider: https://edirc.repec.org/data/isuzhch.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.