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Dual apprenticeship training is a market-driven form of education at the upper secondary level, taking place in firms as well as in vocational schools. So far, little is known about the impact of the business cycle on the number of apprenticeship programs offered by firms. Using panel-data of Swiss cantons from 1988-2004, we find that the influence of the business cycle is statistically significant, but small in size. Instead, supply of apprenticeship programs is driven to a much greater extent by demographic change. Conversely, the number of first-year high school students is not affected by the business cycle. We find, however, that enrollment increases if the population at age 16 grows, but access to high schools does not become more restricted in times of negative growth.

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This study attempts to explain why the transition to a market economy is skill-biased. It shows unequivocal evidence on increased skill wage premium and supply of skills in transition economies. It examines whether similar skill-favouring shifts in the Russian and US economies are driven by the same set of factors. [The] analysis elaborates on the model of alternative theories of the increased wage skill premium and then evaluates three main hypotheses: skill-biased technological change, the market adjustment hypothesis, and the institutional factor hypothesis. To test these hypotheses, the study uses unique linked employer-employee data that spans the 16 years of the Soviet and transition periods in Russia (1985-2000), with a special emphasis on data quality, measurement errors, and retrospective biases. The main conclusion is that there is no uni-causal and time-invariant explanation for skill-biased changes in wages and employment in the Russian economy. The increased skill wage premium has been driven mainly by institutional factors during the early period and by productivity and technological change during the late transition period, and reinforced by market adjustment of wage ratio to the true differences in labour productivity.

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We examine the dynamic role of education and experience as determinants of wages. It is hypothesised that an employee’s education is an important signal to the employer initially. Over time, the returns to schooling should decrease with labour market experience and increase with initially unobserved ability, since the employer gradually obtains better information on the productivity of an employee. Replicating US studies using data from a large German panel data set (GSOEP), we find no evidence for the employer learning hypothesis for Germany. Differentiating blue-collar and white-collar workers and estimating quantile regressions, however, leads to the conclusion that employer learning takes place for blue-collar workers at the lower end of the wage distribution. We further show, that information on the productivity of an employee is to a large extend private.

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We analyze empirically the effects of urban agglomeration on Italian college graduates' work possibilities as entrepreneurs three years after graduation. We find that each 100,000 inhabitant-increase in the size of the individual's province of work reduces the chances of being an entrepreneur by 0.2-0.3 per cent. This result holds after controlling for regional fixed effects and is robust to instrumenting urbanization. Province's competition, urban amenities and dis-amenities, cost of labor, earning differentials between employees and self-employed workers, unemployment rates and value added per capita account for 40 per cent of the negative urbanization penalty. Our result cannot be explained by the presence of negative large-city differentials in returns to education either. In fact, as long as they succeed in entering the largest markets, young entrepreneurs are able to reap-off the benefits of urbanization externalities: every 100,000-inhabitant increase in the province's population raises entrepreneurs' net monthly income by 0.2-0.3 per cent.

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One problem with the theory of firm-specific human capital is that it is difficult to generate convincing examples of investment that could generate the sometimes observed large and continuing effects on earnings. Another approach, called the ‘skill-weights’ view, allows all skills to be general in that there are other firms that use each of the skills. But firms use them in different combinations and with different weights attached to them. The skill-weights view not only has aesthetic appeal, but is consistent with the frequently observed large tenure effects. All of the implications of the traditional view are produced by this approach, and there are a number of other implications that distinguish the new view from the traditional one. The empirical evidence already contains some support for the skill-weights view.

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In order to remain competitive, firms need to keep the quantity and composition of jobs close to the optimal for their given output. Since the beginning of the transition period, Russian industrial firms have been widely reporting that the quantity and composition of hired labor is far from being close to optimal. This paper discusses what kinds of firms in the Russian manufacturing sector are not able to optimize their employment and why. Do they suffer from a labor shortage induced by rapid growth, or are they still struggling with employment overhang? What are the occupations and skills in which there is a supposed surplus or shortage? What factors affect the probability that a firm will report non-optimal employment and be unable to solve this difficulty? Where is the labor excess/shortage concentrated and what makes it persistent? Finally, we discuss the costs of non-optimal employment. The analysis presented in this article is based on the data from a large-scale survey of Russian manufacturing firms.

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Recent theoretical studies suggest that migration prospects can raise the expected return to human capital and thus foster education investment at home or, in other words, induce a brain gain. In a recent paper (Beine, Docquier and Rapoport, Economic Journal, 2008) we used the Docquier and Marfouk (2006) data set on emigration rates by education level to examine the impact of brain drain migration on gross (pre-migration) human capital formation in developing countries. We found a positive effect of skilled migration prospects on human capital growth in a cross-section of 127 developing countries, with an elasticity of about five per cent. In this paper we assess the robustness of our results to the use of alternative brain drain measures, definitions of human capital, and functional forms. We find that the results hold using the Beine et al. (2007) alternative brain drain measures controlling for whether migrants acquired their skills in the home or in the host country. We also regress other indicators of human capital investment on skilled migration rates and find a positive effect on youth literacy while the effect on school enrolment depends on the exact specification chosen.

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The cause of immigrant education mismatch in the host country labour market might not necessarily be discrimination or imperfect transferability of human capital, as argued in previous studies. Immigrants who have gained professional experience in the home country in jobs below their education level might be assessed by host country employers as having lower abilities and skills than those expected from their educational qualifications. Using the Longitudinal Survey of Immigrants to Australia we show that a significant part of the variation in the immigrants’ probability to be over-/under-educated in the Australian labour market can be explained by having been over-/under-educated in the last job in the home country.

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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 upper-secondary 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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While job search theory predicts that active labour market policies (ALMPs) can affect post-unemployment outcomes, empirical evaluations investigating transition rates have mostly focused on the impact of ALMPs on exit rates from the current unemployment spell. We use a social experiment, which was conducted in Denmark in 2005-6, to investigate the effects of a dramatic intensification of ALMPs on reemployment stability. We investigate the nature of this impact. We estimate a duration model with lagged duration dependence to separately identify 'indirect' (via shorter unemployment duration) and 'direct' (through a more efficient matching process) effects of ALMPs on subsequent employment duration. We find that overall intensive activation significantly reduces unemployment recurrence for men, but not for women. When we control for dynamic selection into employment and lagged duration dependence, the positive impact of the treatment becomes smaller but remains significant. Eighty per cent of the global impact of intensification acts through the direct channel for men.

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