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The effect of labor market regulations on training behavior and quality: the German labor market reform as a natural experiment

Author

Listed:
  • Anika Jansen

    (German Federal Institute for Vocational Education and Training (BiBB), Bonn)

  • Mirjam Strupler Leiser

    (University of Bern, Centre for Research in Economics of Education)

  • Felix Wenzelmann

    (German Federal Institute for Vocational Education and Training (BiBB), Bonn)

  • Stefan C. Wolter

    (University of Bern, CESifo & IZA)

Abstract

Labor market frictions are seen in many extensions of the classical human capital theory as a prerequisite for firms financing general training. The labor market reforms in Germany at the beginning of the millennium have therefore been seen by many as a danger to the firms’ willingness to support the apprenticeship training system. This paper analyzes the training strategies German firms deployed to cope with the greater labor market flexibility as a result of the labor market reform. Switzerland where no reforms had taken place serves as the counterfactual. The results show that firms successfully reduced the net-costs of training by involving apprentices in more work and reducing non-productive tasks, like practicing. Contrary to the widespread fear, this adapted training strategy resulted also in a substantial increase in work-related competencies and productivity of apprentices.

Suggested Citation

  • Anika Jansen & Mirjam Strupler Leiser & Felix Wenzelmann & Stefan C. Wolter, 2012. "The effect of labor market regulations on training behavior and quality: the German labor market reform as a natural experiment," Economics of Education Working Paper Series 0083, University of Zurich, Department of Business Administration (IBW).
    • Handle: RePEc:iso:educat:0083
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    References listed on IDEAS

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    Cited by:

    1. Miriam Rinawi & Uschi Backes-Gellner, 2020. "Firms’ method of pay and the retention of apprentices," Oxford Economic Papers, Oxford University Press, vol. 72(1), pages 269-291.
    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.

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    More about this item

    Keywords

    Apprenticeship training; difference-in-differences matching estimator; cost-benefit; labor market reforms;
    All these keywords.

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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