The costs of recruiting apprentices: evidence from German firm-level data

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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