Spillovers in vocational training: an analysis of incentive schemes and reimbursement clauses

The German apprenticeship system has often been considered a role model for vocational education. But recent shortages in apprenticeship positions have led to a renewed debate about appropriate training policy. At present, there are renewed calls to introduce a training levy scheme, which would impose training levies on non-training firms and give additional support to training firms. Some economists favor this policy in order to counteract poaching of trained apprentices. Other economists oppose it strongly on the basis that positive spillovers do not occur. Still others suggest loosening training regulations and allowing for reimbursement clauses in training contracts. Surprisingly, a general economic analysis and comparison of these alternative instruments is still lacking. This work attempts to close this gap. It investigates whether poaching enables deriving of positive spillovers from apprenticeship training, and if so, whether training policy could play a mitigating role.

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