Search Results

Apprenticeship training has gained increased attention worldwide due to record highs of youth unemployment. Following years of a narrow focus on academic education, policymakers worldwide are now more willing to consider alternative means of skill enhancement with a new level of praise for apprenticeship training. However, there is still a perception among parents and children that an academic education is in general a better alternative even in countries where apprenticeship training offers very good labor market prospects. This trend has been particularly strong in Germany and noticeable in Switzerland, though to a lesser extent. As a consequence, companies face increasing difficulty in finding qualified youngsters for their apprenticeship training slots and this, in turn, reduces companies’ willingness to provide these slots.

There is a need to convince young school graduates, their parents and potential training companies of the benefits of a vocational education. Recent empirical research suggests these benefits are manifold: but they are often not known well enough among educational decision makers.

Edited excerpts from publication. Show less

Using the Swiss Graduate Survey, [the authors] study how the type of tertiary education an individual chooses (i.e., vocational or academic) influences career entry and labor market success after graduation. [The] results show that vocational graduates face less risky career entry than academic graduates. Considering endogenous educational choice by using parental education as an instrument, [the authors] find higher returns for vocational tertiary education. In the longer term, initial educational type effects disappear, so vocational and academic graduates face the same risk and return. Therefore, career entry for vocational graduates compares favorably to that of academic graduates, while career success for both educational types equalizes over time.

Published abstract. Show less

There is a wide range of theoretical and empirical analyses suggesting that technological change has increased the demand for skills. Since training is a mechanism to upgrade workers' skills, it would be expected that technical progress strengthens the importance of training on account of the requirement for skills to complement new technology. However, the relationship between technical progress and firms' (employer-funded) continuous training has been little investigated. In our research we address the theoretical gap by building upon existing models from the skill-biased technological change and training literatures. This theoretical platform supports a maintained hypothesis of a positive relationship between training and technological change, which we investigate empirically for Germany using data from the Institute of Employment Research (IAB) establishment panel. Our empirical findings indicate that in Germany a greater share of workers undergo further/continuing training in establishments subject to technological change. An important issue we raise in our empirical analysis is the possibility of endogeneity/simultaneity between training and technological change.

Published abstract. Show less

Keeping up with rapid technological change necessitates constant innovation. Successful innovation depends on both incumbent workers' knowledge, based on experience and knowledge about the latest technologies, and the skills needed to implement them. Both of these knowledge-based elements of innovation can be attained through moderate labour force turnover in combination with continuous training. Based on German micro data, we find empirical evidence in support of training leading to innovation within a multivariate regression framework. However, when instrumenting training by the existence of a union's contract or a works council this impact disappears.

Published abstract. Show less

We test the hypothesis that adolescents' occupational aspirations are more gender-stereotypical if they live in regions where the norm towards gender equality is weaker. For our empirical analysis, we combine rich survey data describing a sample of 1,434 Swiss adolescents in 8th grade with communal voting results dealing with gender equality and policy. We use the voting results to measure spatial variation in the local norm towards (more) gender equality. We find that adolescents living in localities with a stronger norm towards gender equality are significantly and substantively less likely to aspire for a gender-stereotypical occupation. This correlation may reflect different underlying mechanisms, however, and a more detailed analysis in fact reveals that the association between gender norms and occupational aspirations mainly reflects the intergenerational transmission of occupations from parents to their children.

Published abstract. Show less

Evidence suggests that acquiring human capital is related to better life outcomes, yet young peoples' decisions to invest in or stop acquiring human capital are still poorly understood. We investigate the role of time and reference-dependent preferences in such decisions. Using a data set that is unique in its combination of real-world observations on student outcomes and experimental data on economic preferences, we find that a low degree of long-run patience is a key determinant of dropping out of upper-secondary education. Further, for students who finish education we show that one month before termination of their program, present-biased students are less likely to have concrete continuation plans while loss averse students are more likely to have a definite job offer already. Our findings provide fresh evidence on students' decision-making about human capital acquisition and labor market transition with important implications for education and labor market policy.

Published abstract. Show less

This paper examines whether and, if so, how workers' earnings after trade shocks depend on occupational specificity. We construct a measure for occupational specificity reflecting the degree of dissimilarity between the skill bundle in an occupation and the average skill bundle in the labor market. Exploiting cross-regional variation in industry structures, we find that rising import competition from China and Eastern Europe resulted in larger earnings losses for workers with specific skill bundles than for workers with general skill bundles. However, with rising exports to these regions, workers with specific skill bundles had higher earnings than workers with general skill bundles.

Published abstract. Show less

Although trainee pay is central to the economics of work-based training, institutionalists have paid it little attention, while economists typically assume that it is set by market clearing. We document large differences in the pay of metalworking apprentices in three countries: relative to the pay of skilled employees, it is high in Britain, middling in Germany, and low in Switzerland. Combining fieldwork evidence with national survey data, we associate apprentice pay with both institutional attributes and market forces: specifically, with trade union presence and goals, employer organisation, the contractual status of apprentices, the supply of eligible and interested young people, and public subsidies. Apprentice pay appears to have fallen in Britain and Germany as bargaining coverage has declined.

Published abstract. Show less

According to standard human capital theory, firm financed training cannot be explained if skills are of general nature. Nevertheless, investments of firms into general training can be observed and there has been a large literature to explain this puzzle, mostly referring to imperfect labour market issues. In German speaking countries firms invest heavily into apprenticeship training although it is assumed to be general. In our paper, we study the question to what extent apprenticeship training is general at all. Our paper for the first time studies how specificity of training may be defined based on Lazear's skill-weights approach. In our empirical part we use a unique German Qualification Survey, containing extensive information about the required skills at a workplace. We build occupation specific skill-weights and find that the more specific the skill portfolio in an occupation is in comparison to the general labour market, the higher are the net costs firms have to bear for apprenticeship training in the respective occupations. At the same time, the more specific the skill requirements are in an occupation, the smaller is the probability of an occupational change during an employee's entire career. Due to the new definition of occupational specificity, we thus find that apprenticeship training, formerly seen as general training, is very heterogeneous in its specificity.

Published abstract. Show less

The objective of this paper is to model and estimate the impact of labour training financed by the firm on labour demand in Belgium, introducing training potential productivity and cost effects. To model this influence, we assume profit maximising firms producing under a short run monopolistic competition regime. We emphasise that training variables, both qualitative and quantitative, can either increase labour demand through their positive effect on labour physical productivity net from the dropping price required to sell additional production, and that they can decrease labour demand through induced increasing of direct labour costs and wages. Generalised method of moments (GMM) estimations on a panel of 269 firms observed during the period 1998-2004 show non significant impacts of training variables on labour demand, the productivity and cost effects seeming to offset each other. These results allow us to suggest two scenarios in terms of firm and worker behaviour and that subsidiary training could favour employment under the two assumptions that firms don't transform training in an increased productivity/wage mark-up, but convert additional productivity in employment, and workers don't claim for higher wages as a result of additional productivity.

Published abstract. Show less