Samuel Muehlemann and Stefan C. Wolter
The purpose of this paper is to simulate the potential costs and benefits for Spanish firms providing dual apprenticeship training.
Abstract
Purpose
The purpose of this paper is to simulate the potential costs and benefits for Spanish firms providing dual apprenticeship training.
Design/methodology/approach
The paper conducts simulations of ten training occupations in six different industries in Spain. For these simulations, the authors combined Spanish wage data and the existing training curriculum regarding instruction times in vocational school in Spain with data from Swiss firms offering training in similar occupations. These data contain information regarding the amount of workplace training, relative apprentice productivity, and the relative importance of non-wage training costs (such as training equipment).
Findings
The authors found that training occupation, training scenario, and firm size are important determinants of the authors’ simulations for the expected net costs of apprenticeship training in Spanish firms. Consequently, the break-even level of apprentices’ wages differs significantly by training occupation and training scenario, suggesting that one prescribed apprentice wage for all sectors and occupations would be detrimental to the willingness of many firms to provide training places.
Practical implications
Dual apprenticeship training may improve the labor market transition for Spanish youth. The paper provides guidelines for regulatory frameworks that allow firms to provide apprenticeship training without having to bear net training costs – an important condition given that apprentices are free to leave the training firm upon graduation.
Social implications
The authors’ simulations show that Spanish firms would be able to provide high-quality apprenticeship training programs that would also appeal to more talented youth because of the combination of a decent earning opportunity during the apprenticeship and good future career options.
Originality/value
This paper provides novel and direct empirical evidence regarding the framework conditions within the Spanish apprenticeship system, thus incentivizing both firms and individuals to participate in dual apprenticeship training programs.
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Luca Moretti, Martin Mayerl, Samuel Muehlemann, Peter Schlögl and Stefan C. Wolter
The purpose of this paper is to compare a firm’s net cost and post-apprenticeship benefits of providing apprenticeship training in Austria and Switzerland: two countries with many…
Abstract
Purpose
The purpose of this paper is to compare a firm’s net cost and post-apprenticeship benefits of providing apprenticeship training in Austria and Switzerland: two countries with many similarities but some critical institutional differences.
Design/methodology/approach
The authors draw on detailed workplace data with information on the costs and benefits of apprenticeship training, as well as on hiring costs for skilled workers from the external labour market. The authors use nearest-neighbour matching models to compare Austrian firms with similar Swiss firms based on observable characteristics.
Findings
On average, a Swiss firm generates an annual net benefit of €3,400 from training an apprentice, whereas a firm in Austria incurs net costs of €4,200. The impetus for this difference is largely a higher relative apprentice pay in Austria. However, compared with Swiss firms, Austrian firms generate a higher post-training return by retaining a higher share of apprentices and savings on future hiring costs.
Practical implications
The authors demonstrate that apprenticeship systems can exist under different institutional environments. For countries currently in the process of establishing or expanding apprenticeship systems, the comparative analysis clearly shows that policymakers should consider more than just one country’s particular apprenticeship model.
Originality/value
The authors provide a first comparative analysis between two apprenticeship countries that empirically assesses a firm’s costs and benefits of training during an apprenticeship programme and also provides a monetary value of a particular type of post-training benefits that firms can generate by retaining former apprentices as skilled workers (i.e. savings in future hiring costs for skilled workers).
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Stefan C. Wolter and Bernhard A. Weber
Shows the results of a new model for calculating private rates of return to education. The so‐called “cost‐benefit‐model” takes into account the influence of the existing wage…
Abstract
Shows the results of a new model for calculating private rates of return to education. The so‐called “cost‐benefit‐model” takes into account the influence of the existing wage structure, institutional factors as the cost of education and the fiscal system and risk premiums for dropping out of school as well as differences in unemployment. The model produces results that are relatively easy to interpret at the economic policy level and can easily be used to simulate the effects of changing parameters. The first empirical results for Switzerland indicate that once educational costs have been deducted, wage‐earning advantages for different educational groups are insignificant. The empirical results speak against the political demand – at least in Switzerland – that those who directly benefit from education should pay more towards its costs.
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Stefan C. Wolter and Bernhard A. Weber
The sudden slump in the labour market of the 1990s made it necessary for Switzerland to alter its labour market policy, which from being almost exclusively passive became an…
Abstract
The sudden slump in the labour market of the 1990s made it necessary for Switzerland to alter its labour market policy, which from being almost exclusively passive became an active policy. Indeed a lack of suitable qualifications can be considered as one of the main factors prolonging the unemployment of those concerned, in Switzerland. Even so, the policy of relying on massive continuous education and retraining programmes as the most efficient solution to this problem needs to be called into question. For many years a majority of those who now find themselves unemployed neglected the option of seeing to their own continuous education needs. The reasons for this inactivity at the individual level may well lie in the lack of financial incentives. This in turn is the result of a wage structure that is still very much linked to years of service, with education‐related differences in wages being very slight.
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Stefan C. Wolter and André Zbinden
Labour market expectations and especially wage expectations are important determinants for individual schooling decisions. However, research on individual expectations of students…
Abstract
Labour market expectations and especially wage expectations are important determinants for individual schooling decisions. However, research on individual expectations of students is scarce. The paper presents the Swiss results of a survey that was conducted in ten European countries. Its main findings are that point estimates of wages after graduation are close to actual wages, whereas the expectations of the wage gain in the first ten years of professional experience exceed the actual wage gains significantly. We find that rates of return to education that are calculated on the basis of individual wage and cost expectations as well as individual time preferences can be explained partially by the seniority of students, the self‐perception of their academic performance and their subjective job perspectives.
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This paper is about the effects of unemployment on consumption behaviour through “job security” in Switzerland. Based on a behavioural model of consumption the paper establishes…
Abstract
This paper is about the effects of unemployment on consumption behaviour through “job security” in Switzerland. Based on a behavioural model of consumption the paper establishes the links between job security and consumption empirically. In a second step, perceived “job security” as reported in the Swiss Consumer Survey is then connected with the labour market. The paper finds that the record high level of unemployment since 1991 has mainly caused the observed deterioration of the perceived “job security”. Two different scenarios of unemployment rates are then developed to show the quantitative effects unemployment had on perceived “job security” and finally through this measure of consumer confidence on consumption expenditures. In conclusion the unusually high number of unemployed have acted as a psychological shock to change the subjective assessment of “job security” to such a degree that significant changes in consumer behaviour have resulted.
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Belinda Walther, Jürg Schweri and Stefan C. Wolter
The classical form of dual vocational training in Switzerland is on‐the‐job training combined with theoretical education in a school. In order to be an attractive educational…
Abstract
Purpose
The classical form of dual vocational training in Switzerland is on‐the‐job training combined with theoretical education in a school. In order to be an attractive educational choice for both enterprises and pupils, the apprenticeship model has to be constantly adapted to the demands of the labour market. As a potential model for future apprenticeship training, large firms started to concentrate their apprenticeship training in one or a few sites. More recently, independent external firms have been set up with the express purpose of training apprentices for other companies. This article aims to discuss these new developments.
Design/methodology/approach
This article bases its discussion of the developments on the basis of a unique data set comprising more than 2,300 training companies in Switzerland.
Findings
The observations reported in this article suggest that training in a training centre is a viable alternative to the usual in‐house apprenticeship system where the apprentice is trained within the company. However, training centres will never be an ideal solution for all occupations or for every company. Training centres are primarily worthwhile for investment‐intensive occupations where the main objective is to invest in an apprentice's human capital and thus help ensure a steady supply of highly qualified workers.
Originality/value
The article presents useful developments in the use of training centres.
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Jens Mohrenweiser and Uschi Backes‐Gellner
The purpose of this paper is to derive an empirical method to identify different types of training strategies of companies based on publicly available company data.
Abstract
Purpose
The purpose of this paper is to derive an empirical method to identify different types of training strategies of companies based on publicly available company data.
Design/methodology/approach
Using a ten‐year panel, the within‐firm retention rate, defined as the average proportion of apprentices staying in a company in relation to all apprenticeship graduates of a company over several years, was analyzed. The within‐firm retention rate is used to identify these companies' training strategies.
Findings
It was shown that companies' motivation for apprenticeship training in Germany is not homogeneous: 19 percent of all companies follow a substitution strategy and 44 percent follow an investment strategy. The determinants of the substitution strategy were estimated and, for example, sizeable differences were found between sectors with different skill requirements and between firms' coverage of industrial relations.
Research limitations/implications
The method is well suited to classify substitution‐motivated training firms but it is less precise in identifying the investment motivation. Moreover, very small firms which train only one apprentice need longer panel duration for precise results and therefore the classification results are less precise for very small firms.
Practical implications
The classification can be used to identify determinants of company participation in apprenticeship training and to predict changes in demand for apprentices.
Originality/value
A simple and innovative method of identifying different types of training motivation with publicly available company data was derived, which has so far been possible only with very detailed company‐specific apprenticeship surveys.