Impact of coronavirus on apprentices and trainees

Apprenticeships and traineeships are an important pathway into the workforce for 150,000 people each year. Young people in particular rely on them to transition successfully from school to a career. There are about 270,000 currently enrolled apprentices and trainees, and about 70 per cent of these are under the age of 25. This paper explores the impact of the coronavirus on apprentices and trainees. It looks at previous recessions to see what history can tell us to expect. Key points in the paper include: the Mitchell Institute estimates new apprenticeships/traineeships will decline by 30 per cent within two years; previous recessions show an amplified relationship between the unemployment rate and apprenticeship/traineeship figures; the Mitchell Institute estimates the reduction in the number of available apprenticeships and traineeships will lead to 50 per cent more school leavers classified as 'not in employment, education or training' (NEET); current policies designed to support apprentices and trainees, such as the JobKeeper program, may mask the scale and severity of the decline; and downturns in the number of apprenticeships can have long lasting effects and raise the prospect of skills shortages occurring which hamper a coronavirus economic recovery. The paper offers the following policy responses: increasing employer incentives and wage subsidies to make it easier for employers to keep current apprentices and trainees or bring on new ones; integrating new apprentices and trainees into public spending projects to grow the number of opportunities available; and establishing innovative labour market programs that provide apprentices and trainees with work in their occupation while the economy recovers.

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