Spillovers in Vocational Training
The German apprenticeship system is often considered a role model for vocational education. Its influence on economic growth and technological progress through the provision of human capital to the workforce is widely acknowledged. But recent declines in the number of apprenticeships have led to increasing unrest among policy makers. To counter this development, the government is considering to introduce a training levy scheme that collects training levies from non-training firms in order to subsidize apprenticeship training ("Ausbildungsplatzabgabe"). Such training levy schemes already exist in several industrialized countries and even in some sectors in Germany. Yet, economists differ greatly in opinion about this policy. More surprisingly, however, a general economic analysis of this policy instrument is still lacking. Recent contributions have relied on rather qualitative and partial analyses. This paper aims at closing this gap. Following the training literature, we use a simple oligopsonistic labor market model. Such a setting allows to explain why firms provide and (at least partially) finance general vocational training. Moreover, it can demonstrate that a positive externality arises as other firms benefit from vocational training through poaching. In principle, the Pigouvian prescription of a subsidy scheme financed by a non-distortionary tax could restore the social optimum. The proposed training levy scheme, by contrast, is a particular scheme that links subsidies and levies. This paper unveils that it basically corresponds to a uniform subsidy on apprenticeship training that is financed by a distortionary tax on labor. We show that introducing such a levy scheme can entail ambiguous repercussions on general welfare.
|Date of creation:||Sep 2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.vwl.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-62, October.
- 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.
- Lang, Kevin, 1991. "Persistent Wage Dispersion and Involuntary Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 106(1), pages 181-202, February.
- Acemoglu, Daron & Pischke, Jörn-Steffen, 1996.
"Why do Firms Train? Theory and Evidence,"
CEPR Discussion Papers
1460, C.E.P.R. Discussion Papers.
- Daron Acemoglu & Jorn-Steffen Pischke, 1996. "Why Do Firms Train? Theory and Evidence," NBER Working Papers 5605, National Bureau of Economic Research, Inc.
- Acemoglu, D. & Pischki, J.S., 1996. "Why Do Firms Train? Theory and Evidence," Working papers 96-7, Massachusetts Institute of Technology (MIT), Department of Economics.
- Edward P. Lazear, 2003. "Firm-Specific Human Capital: A Skill-Weights Approach," NBER Working Papers 9679, National Bureau of Economic Research, Inc.
- Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9.
- Falkinger, Josef, 1996. "Efficient private provision of public goods by rewarding deviations from average," Journal of Public Economics, Elsevier, vol. 62(3), pages 413-422, November.
- Gersbach, Hans & Schmutzler, Armin, 2003.
"A Product Market Theory of Worker Training,"
CEPR Discussion Papers
3940, C.E.P.R. Discussion Papers.
- Hans Gersbach & Armin Schmutzler, 2002. "A Product Market Theory of Worker Training," SOI - Working Papers 0214, Socioeconomic Institute - University of Zurich, revised Jan 2003.
- Gersbach, Hans & Schmutzler, Armin, 2001. "A Product Market Theory of Worker Training," IZA Discussion Papers 327, Institute for the Study of Labor (IZA).
- Rainer Winkelmann, 1997. "How young workers get their training: A survey of Germany versus the United States," Journal of Population Economics, Springer, vol. 10(2), pages 159-170.
- Katz, Eliakim & Ziderman, Adrian, 1990. "Investment in General Training: The Role of Information and Labour Mobility," Economic Journal, Royal Economic Society, vol. 100(403), pages 1147-58, December.
When requesting a correction, please mention this item's handle: RePEc:lmu:muenec:693. 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: (Alexandra Frank)
If references are entirely missing, you can add them using this form.