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Why Some Firms Train Apprentices and Many Others Do Not

Author

Listed:
  • Wolter, Stefan C.

    () (University of Bern)

  • Mühlemann, Samuel

    () (University of Munich)

  • Schweri, Jürg

    () (Swiss Federal Institute for Vocational Education and Training)

Abstract

The latest study investigating the cost-benefit ratio of apprenticeship training for Swiss companies has shown that most apprentices offset the cost of their training during their apprenticeship on the basis of the productive contribution of the work they perform. Given this outcome, it is worth investigating why so many firms choose not to train apprentices. Maximum likelihood selection models were used to estimate the net cost of training for firms without an apprenticeship programme. The models show, firstly, that non-training firms would incur significantly higher net cost during the apprenticeship period if they would switch to a training policy and secondly, that this less favourable cost-benefit ratio is determined less by cost than by absence of benefit. For the apprenticeship system as such the results indicate, that as long as training regulations and the market situation permit a cost effective training of apprentices, companies do not need specific labour market regulations or institutions to offer training posts. In this respect, the Swiss findings might be of interest for the on-going German discussion about the expected repercussions of a more general labour market deregulation on the apprenticeship training system.

Suggested Citation

  • Wolter, Stefan C. & Mühlemann, Samuel & Schweri, Jürg, 2003. "Why Some Firms Train Apprentices and Many Others Do Not," IZA Discussion Papers 916, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp916
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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. Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
    3. Colm Harmon & Ian Walker & Niels Westergaard-Nielsen (ed.), 2001. "Education and Earnings in Europe," Books, Edward Elgar Publishing, number 2237, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    cost-benefit analysis; apprenticeship training; firm-sponsored training;

    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
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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