Search Results

Using a longitudinal dataset based on the [Programme for International Student Assessment] PISA 2000 survey, [the authors] analyze the effect of inter-firm and occupational mobility on post-training wages in Switzerland to assess the transferability of the human capital acquired in training. [They] show that OLS provides a lower bound estimate of the wage effects of inter-firm and occupational mobility. Inter-firm mobility has no significant wage effect in OLS regressions. However, those who stay in their occupational field earn about five per cent more than their colleagues who change occupation. [The authors] find no evidence for adverse selection when accounting only for apprentices' level of ability. Accounting for the endogeneity of mobility tends to increase the estimated wage differential between occupation stayers and changers, but not between firm stayers and movers. [The authors] conclude that occupation-specific human capital is an important component of apprenticeship training and accounts for a part of the returns to training.

Published abstract. Show less

As Switzerland experiences a severe shortage of nurses, this paper investigates the impact of students' ex ante wage expectations on their choice to pursue a nursing college education. This analysis contributes to a small yet rapidly developing body of literature that uses subjective expectation data to predict educational choices. [The authors] surveyed a full cohort of healthcare trainees in their third year of training. The main result is that those trainees (in upper-secondary education) who expected a greater return from nursing college (tertiary education) were more likely to enroll in nursing college later on. This suggests that policies that increase returns from studying nursing can attract students to nursing. In addition, the results confirm that subjective wage expectation data are useful in modeling individual choice.

Published abstract reprinted by permission of the copyright owner. Show less

[The authors] analyze horizontal mismatch in Switzerland defined as a mismatch between the type of skills acquired by students and the skills required for their job. [The authors] investigate the argument in the literature that the more specific an education system is, the higher are the wage penalties due to horizontal mismatch. Switzerland is an ideal case to test this hypothesis because it relies heavily on vocational education and training. The data stems from the longitudinal Swiss Household Panel in the years 1999 to 2012 and contains subjective and objective measures of mismatch. Controlling for time-invariant heterogeneity in fixed effects regressions, the wage penalty for self-reported horizontal mismatch is 3.2 per cent for women, yet not significant for men.

Not working in a learned occupation does not lead to significant wage effects, neither for women nor men. The wage effects found are similar for workers with general and vocational education background. Overall, wage penalties for horizontal mismatch are small and do not support the hypothesis of higher penalties for mismatch due to vocational education. [The authors] conclude that vocational education is more transferable than often assumed, and that continuous training and on-the-job learning allow workers to update their skills continuously.

Published abstract reprinted by permission of the copyright owner. Show less

Education policymakers are currently faced with the challenge of enabling young people with learning difficulties to achieve an upper-secondary level qualification. Switzerland has introduced a new type of combined school/work-based [vocational education and training] VET programme that lasts two years. One of the key pre-requisites for success of two-year VET programmes is the willingness of host companies to create an adequate number of apprenticeship positions. We therefore examine the costs and benefits of two-year VET programmes for a sample of 409 host companies. Our main findings indicate that, on average, the value of the productive output of apprentices in two-year VET programmes slightly exceeds the overall costs of the training provided by host companies. Firms that operate in a competitive market are thus able to provide apprenticeship training to less capable young people.

Published abstract reprinted by permission of the copyright owner. Show less

Recent literature suggests that vocational education provides individuals with smoother transitions into the labor market but lower wages over the lifecycle. A possible mechanism explaining lower wages is horizontal mismatch, defined as a mismatch between qualifications acquired by individuals and those required for their current job. Some studies have found higher mismatch wage penalties when individuals' education is more specific. Therefore, we analyze horizontal mismatch in Switzerland, the country with the highest proportion of firm-based vocational education and training in the OECD. We use subjective and objective measures of mismatch from the Swiss Household Panel. While we find sizeable mismatch wage penalties in [ordinary least squares] OLS estimations, effects are small or insignificant in fixed-effects regressions. This holds for workers with vocational and general education background alike. We conclude that vocational education is more transferable than often assumed. We finish with recommendations on concept and methods for future analyses of horizontal mismatch.

Published abstract. Show less

We use a unique data set about the wage distribution that Swiss students expect for themselves ex ante, deriving parametric and non-parametric measures to capture expected wage risk. These wage risk measures are unfettered by heterogeneity which handicapped the use of actual market wage dispersion as risk measure in earlier studies. Students in our sample anticipate that the market provides compensation for risk, as has been established with risk augmented Mincer earnings equations estimated on market data: higher wage risk for educational groups is associated with higher mean wages. With observations on risk as expected by students we find compensation at similar elasticities as observed in market data. The results are robust to different specifications and estimation models.

Published abstract reprinted by permission of the copyright owner. Show less

Apprenticeship systems are essentially based on the voluntary participation of firms that provide (and usually also finance) training positions, often incurring considerable net training costs. One potential, yet under-researched explanation for this behavior is that firms act in accordance with the norms and expectations they face with in the local labor market in which they operate. In this paper, we focus on the Swiss apprenticeship system and ask whether local norms towards the private, rather than the public, provision of training influence firms' decisions to offer apprenticeship positions. In line with this hypothesis, we find that the training incidence is higher in communities characterized by a stronger norm towards the private provision of training, which we measure using local results from two national-level plebiscites that explicitly dealt with the role of the state in the context of the apprenticeship system. This finding turns out to be robust to a series of alternative specifications and robustness checks, as well as to an instrumental-variable strategy that tackles the issue of potential endogeneity of normative attitudes.

Published abstract reprinted by permission of the copyright owner. Show less

Purpose - The classical form of dual vocational training in Switzerland is on-the-job training combined with theoretical education in a school. In order to be an attractive educational choice for both enterprises and pupils, the apprenticeship model has to be constantly adapted to the demands of the labour market. As a potential model for future apprenticeship training, large firms started to concentrate their apprenticeship training in one or a few sites. More recently, independent external firms have been set up with the express purpose of training apprentices for other companies. This article aims to discuss these new developments. Design/methodology/approach - This article bases its discussion of the developments on the basis of a unique data set comprising more than 2,300 training companies in Switzerland. Findings - The observations reported in this article suggest that training in a training centre is a viable alternative to the usual in-house apprenticeship system where the apprentice is trained within the company. However, training centres will never be an ideal solution for all occupations or for every company. Training centres are primarily worthwhile for investment-intensive occupations where the main objective is to invest in an apprentice's human capital and thus help ensure a steady supply of highly qualified workers. Originality/value - The article presents useful developments in the use of training centres.

Published abstract reprinted by permission of the copyright owner. Show less

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 program. The models show, firstly, that non-training firms would incur significantly higher net cost during the apprenticeship period if they switched 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 of the apprenticeship training system.

Published abstract reprinted by permission of the copyright holder. Show less

We use a unique data set about the future wage distribution that Swiss students expect for themselves ex-ante, suggesting that students use very little private information about their wage prospects. Expectations appear much more anchored to perceptions of actual contemporaneous market data. Students even anticipate that the market provides compensation for risk, as has been established with Risk Augmented Mincer earnings equations estimated on market data: higher wage risk for educational groups is associated with higher mean wages. With observations on risk as expected by students we find compensation at similar elasticities as observed in market data. The results are robust to different specifications and estimation models.

Published abstract. Show less