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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.

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In this paper, [the authors] use firm-level data to analyse a firm's costs of recruiting apprentices in Germany. [They] find that recruitment costs amount on average to 600 Euros per hire (approximately one month of apprentice pay), but costs are heterogenous across firms and vary strongly with the training occupation. [The] results suggest that shortages in the local supply of apprentices and a high degree of competition among training firms in the region increase recruitment costs. Furthermore, [the authors] find that firms with a works council or an investment-oriented training strategy incur higher recruitment costs. Finally, marginal recruitment costs first increase but eventually decrease for firms hiring a large number of apprentices. [The] results are important in light of the increasing firm competition for talented school leavers induced by demographic change.

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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.

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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.

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Mobility and flexibility are increasingly demanded as structural change challenges established educational systems and traditional occupational demarcations. We use Lazear’s skill-weights approach (2003) first to operationalise the degree of specificity of skill combinations in an innovative manner and second to derive hypotheses about the effects of occupation-specific skill combinations. In our empirical section, we find that the more specific an occupation, the smaller is the probability of an occupational change, as expected. Furthermore, we are able to identify different clusters of occupations that are characterised by similar skill combinations within a given cluster and different skill combinations between clusters. We find that employees in very specific occupations have a comparatively higher probability of changing their occupation within than between skill clusters. Moreover, occupational mobility within a skill cluster is accompanied by wage gains, while mobility between skill clusters results in wage losses. Not surprisingly, the more specific the former occupation is, either the higher is the resulting wage loss or the smaller is the resulting wage gain depending on whether the move is between or within skill clusters, respectively. Therefore, the acquired skill combination rather than the occupation per se crucially determines the mobility of an employee.

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Individual returns on continuing vocational training have been in the focus of many empirical and theoretical papers. Most of the works do not explicitly discuss returns to training that is financed fully or partly by the employee. This seems surprising since several publicly funded programs to increase training participation aim at a stronger employee involvement in the financing of continuing vocational training. This paper analyses the participation in and the determinants and effects of employee-financed training using German panel data. The question is addressed, which employees invest and which benefit from training. Results show that employee-investment in training yields only moderate wage returns and has no significant impact on the further career development, especially when compared to the effects of enterprise-financed training. On the other hand, employees financing their own training gain in terms of unemployment risk reduction and the improvement in the matching of individual skills and job requirements.

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This study investigates the impact of finishing versus dropping out of college on self-esteem. Using data spanning three decades from the US National Longitudinal Survey of Youth, [the authors] find that dropping out of a four-year college significantly decreases self-esteem compared to graduating. In addition, two- and four-year college graduates have significantly higher self-esteem than high school graduates never enrolled in college. However, individuals dropping out of a two- or a four-year college miss out on this positive effect. These findings are long-term effects still visible when dropouts are in their late 40s.

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We empirically investigate the joint training decisions of workers and firms. The aim of our study is to learn how various cost components affect workers' (non-)participation in training. In particular, we separately consider monetary and non-monetary training costs, which is possible thanks to an especially rich dataset that includes both participants and non-participants. Our estimation results show that workers whose firms cover some of their training costs would generally be more likely to have assumed the full training costs themselves had they not received employer support. Moreover, the share of self-financed training, as compared to employer-supported training, is generally low. Thus, firms moderate virtually all training decisions and, as a result, considerably influence (non-)participation patterns. Interestingly, although training non-participation can be attributed to both monetary and non-monetary costs, the latter seem to comprise the more binding restriction. That is, time is more costly than money.

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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.

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The transition from school-to-work has been a burning issue in most countries for the last decades. So far research on this topic has not been conclusive, and it is still not clear whether transition problems are just individual, linked to the type of education followed at uppersecondary level, or just a prolongation of problems arising from poor school performance during compulsory education. This paper uses a unique Swiss longitudinal data-set, which includes information on PISA 2000 scores and the pathways chosen after completing compulsory school. Descriptive results show that students in vocational training, who obtained lower PISA results, are significantly more likely to be in an inadequate employment situation two years after finishing vocational training. Further analysis shows, however, that it is the type of vocational training followed at upper-secondary level that is decisive for the success in the transition. Nevertheless, individual PISA scores have an indirect impact on the transition results, as they are an important factor explaining which pupils are more likely to get into an intellectually demanding vocational training and which ones are not.

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