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School-to-Work Programs in the United States: A Multi-Firm Case Study of Training, Benefits, and Costs

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  • Laurie J. Bassi
  • Jens Ludwig

Abstract

This paper provides one of the first detailed analyses of the training and finances of school-to-work (STW) programs in the United States. The data are from case studies of seven STW programs sponsored by firms of diverse size, type, and location. In almost every case, the firm paid at least some of the costs of general training. Most firms recoup some of these costs through rents captured by hiring former apprentices, but only in two cases do benefits seem likely to outweigh costs. The findings suggest that certain imperfections in American labor markets—for example, compensation below marginal product for some workers, and a gap between productivity and wages that increases with workers' skill levels—motivate firms to invest in general skills, but these labor market imperfections may not be great enough to allow firms to sustain STW programs over the long run.

Suggested Citation

  • Laurie J. Bassi & Jens Ludwig, 2000. "School-to-Work Programs in the United States: A Multi-Firm Case Study of Training, Benefits, and Costs," ILR Review, Cornell University, ILR School, vol. 53(2), pages 219-239, January.
    • Handle: RePEc:sae:ilrrev:v:53:y:2000:i:2:p:219-239
    DOI: 10.1177/001979390005300203
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    References listed on IDEAS

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    1. Thomas J. Kane & Dietmar Harhoff, 1997. "Is the German apprenticeship system a panacea for the U.S. labor market?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 10(2), pages 171-196.
    2. Lynch, Lisa M. (ed.), 1994. "Training and the Private Sector," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226498102, September.
    3. Robert H. Topel, 1997. "Factor Proportions and Relative Wages: The Supply-Side Determinants of Wage Inequality," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 55-74, Spring.
    4. Lisa M. Lynch, 1994. "Training and the Private Sector: International Comparisons," NBER Books, National Bureau of Economic Research, Inc, number lync94-1.
    5. John M. Barron & Mark C. Berger & Dan A. Black, 1999. "Do Workers Pay for On-The-Job Training?," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 235-252.
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