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Apprentices cause high costs for training firms, while it remains unclear if the productivity of apprentices during the training period offsets these costs. To give an answer this paper uses the theoretical hypothesis that firms have to re-earn net costs by paying their former apprentices a lower wage in comparison to skilled employees hired from the labour market. We analyse the wage differences between job changers and job stayers after apprenticeship making both groups as similar as possible in order to avoid estimation biases induced by selection effects. This implies that we calculate the wage effect of a profession-specific change of employer on the individual deviation from the average wage markup. We use spell data from the employment statistics of the Federal Employment Agency (IABS) from 1993 to 2004. Our results indicate that in all occupation groups productivity of apprentices is higher than their cost.

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Small average wage effects of employer and/or occupation changes after apprenticeship training mask large differences between occupation groups and apprentices with different schooling backgrounds. Apprentices in commerce and trading occupations strongly profit from an employer change. Employer and occupation changers in industrial occupations face large wage disadvantages, however. We are the first to analyse these differences while those quality differences between training firms that have been widely studied before are small. This paper also explains differences between previous findings by comparing their empirical estimation strategies. It demonstrates that selectivity into occupations and changes, unobserved heterogeneity between occupations, and sample selection matter. Finally, it proposes several improvements in the estimation technique to measure apprenticeship quality.

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