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Why Do Firms Train Apprentices? The Net Cost Puzzle Reconsidered

Author

Listed:
  • Mohrenweiser, Jens
  • Zwick, Thomas
Abstract
This paper investigates the short-term costs and benefits of apprenticeship training in Germany. It calls into question the popular stylised fact that apprenticeship training always leads to net costs during the apprenticeship period. We analyse the impact of the proportion of different occupational groups of apprentices on firm performance. We use representative matched employer?employee panel data that allow us to correct for different sources of estimation bias. We show that the proportion of apprentices in trade, commercial, craft and construction occupations has a direct positive impact on firm performance: the companies cover their training costs immediately. In contrast, companies with apprentices in the manufacturing occupations face net training costs during the apprenticeship period but gain by the long-term employment of its graduate apprentices.

Suggested Citation

  • Mohrenweiser, Jens & Zwick, Thomas, 2008. "Why Do Firms Train Apprentices? The Net Cost Puzzle Reconsidered," ZEW Discussion Papers 08-019, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:7228
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    apprenticeship training; performance; panel data estimation;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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