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The Impact of Hiring Costs for Skilled Workers on Apprenticeship Training: A Comparative Study

Author

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  • Aepli, Manuel

    (Swiss Federal Institute for Vocational Education and Training)

  • Mühlemann, Samuel

    (University of Munich)

  • Pfeifer, Harald

    (BIBB)

  • Schweri, Jürg

    (Swiss Federal Institute for Vocational Education and Training)

  • Wenzelmann, Felix

    (BIBB)

  • Wolter, Stefan C.

    (University of Bern)

Abstract

This study analyzes the relationship between firms' costs of hiring skilled workers and their provision of internal apprenticeship training. Our empirical analysis draws on four waves of firm surveys conducted in Germany and Switzerland that include detailed information on firms' hiring costs for skilled workers and training practices. Using an indicator of labor market tightness as an instrumental variable, we identify a substantial hiring cost elasticity of apprenticeship contracts of 1.4 for Swiss firms. Although we also find a positive and increasing cost elasticity for German firms over time, its magnitude is considerably smaller. Our results are consistent with the perspective that longer-term post-training benefits are more significant in a country with frictions in the labor market and contribute to a better understanding of firms' training behavior.

Suggested Citation

  • 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).
    • Handle: RePEc:iza:izadps:dp16919
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    References listed on IDEAS

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    Cited by:

    1. Carolin Linckh & Samuel Muehlemann & Harald Pfeifer, 2024. "Beggars cannot be choosers: The effect of labor market tightness on hiring standards, wages, and hiring costs," Economics of Education Working Paper Series 0217, University of Zurich, Department of Business Administration (IBW).

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    More about this item

    Keywords

    hiring costs for skilled workers; apprenticeship training;

    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
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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