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Does Occupational Deregulation Affect In-Company Vocational Training? – Evidence from the 2004 Reform of the German Trade and Crafts Code

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  • Runst Petrik

    (Institute for Small Business Economics (ifh), University of Goettingen, Heinrich-Düker-Weg 6, 37073Goettingen, Germany)

  • Thomä Jörg

    (Institute for Small Business Economics (ifh), University of Goettingen, Heinrich-Düker-Weg 6, 37073Goettingen, Germany)

Abstract

The European Commission actively evaluates occupational entry restrictions in all member states. This has attracted a growing interest among scholars of the German crafts sector as it is governed by an idiosyncratic national set of rules. We estimate the effects of the deregulation of the German Trade and Crafts Code in 2004 on the overall vocational training levels in affected crafts trades. We employ Difference-in-Differences regressions as well as Synthetic Control Methods on data for the entire population of the German crafts sector. We provide evidence that the overall effect of the reform on vocational training levels was negative. While we cannot comprehensively rule out all potential confounding factors, we address competing explanations related to demand shocks, recession effect, and migration. In addition, there is evidence that the overall deregulation effects can be decomposed into a sunk-cost-channel and a firm size channel.

Suggested Citation

  • Runst Petrik & Thomä Jörg, 2020. "Does Occupational Deregulation Affect In-Company Vocational Training? – Evidence from the 2004 Reform of the German Trade and Crafts Code," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(1), pages 51-88, February.
    • Handle: RePEc:jns:jbstat:v:240:y:2020:i:1:p:51-88:n:5
    DOI: 10.1515/jbnst-2018-0059
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    More about this item

    Keywords

    regulation; occupational licensing; impact analysis; vocational training;
    All these keywords.

    JEL classification:

    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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