IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp319.html
   My bibliography  Save this paper

Why Do Firms Train? Empirical Evidence on the First Labour Market Outcomes of Graduated Apprentices

Author

Listed:
  • Euwals, Rob

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • Winkelmann, Rainer

    (University of Zurich)

Abstract

The apprenticeship system is the most important source of formal post-secondary training in Germany. Our paper contributes to the ongoing debate as to why firms are willing to invest in such training even though many apprentices will leave the training firm soon after completion of the apprenticeship. Using German register data - the IAB Employment Sample - we find that apprentices staying with their training firm after graduation have (1) higher wages and (2) longer first-job durations than apprentices leaving the training firm. These results support theories according to which firms use the apprenticeship system to select and retain the more able apprentices, thereby recouping the costs of investing in skills that are portable in principle.

Suggested Citation

  • Euwals, Rob & Winkelmann, Rainer, 2001. "Why Do Firms Train? Empirical Evidence on the First Labour Market Outcomes of Graduated Apprentices," IZA Discussion Papers 319, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp319
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp319.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June.
    2. Wolfgang Franz & Joachim Inkmann & Winfried Pohlmeier & Volker Zimmermann, 2000. "Young and Out in Germany (On Youths? Chances of Labor Market Entrance in Germany)," NBER Chapters, in: Youth Employment and Joblessness in Advanced Countries, pages 381-426, National Bureau of Economic Research, Inc.
    3. Daron Acemoglu & Jörn-Steffen Pischke, 1998. "Why Do Firms Train? Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 79-119.
    4. 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.
    5. Regina T. Riphahn, 2002. "Residential location and youth unemployment: The economic geography of school-to-work transitions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 115-135.
    6. Werwatz, A., 1996. "How firm-specific is German apprenticeship training?," SFB 373 Discussion Papers 1996,12, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    7. Rainer Winkelmann & Klaus Zimmermann, 1998. "Is job stability declining in Germany? Evidence from count data models," Applied Economics, Taylor & Francis Journals, vol. 30(11), pages 1413-1420.
    8. Damon Clark, 2001. "Why do German Firms Subsidize Apprenticeship Training?: Tests of the Asymmetric Information And Mobility Costs Explanation," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 102-106.
    9. David G. Blanchflower & Richard B. Freeman, 2000. "Youth Employment and Joblessness in Advanced Countries," NBER Books, National Bureau of Economic Research, Inc, number blan00-1.
    10. Franz Wolfgang & Zimmermann Volker, 1999. "Mobilität nach der beruflichen Erstausbildung: Eine empirische Studie für Westdeutschland / Job Mobility after Apprenticeship Training in West Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 219(1-2), pages 143-164, February.
    11. Acemoglu, Daron & Pischke, Jorn-Steffen, 1999. "Beyond Becker: Training in Imperfect Labour Markets," Economic Journal, Royal Economic Society, vol. 109(453), pages 112-142, February.
    12. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, vol. 47(4), pages 939-956, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stefan Bender & Till von Wachter, 2006. "In the Right Place at the Wrong Time: The Role of Firms and Luck in Young Workers' Careers," American Economic Review, American Economic Association, vol. 96(5), pages 1679-1705, December.
    2. Anette Boom, "undated". "Firms' Investments in General Training and the Market for Skilled Labour," Papers 013, Departmental Working Papers.
    3. Beckmann, Michael, 2002. "Lohnstrukturverzerrung und betriebliche Ausbildung : empirische Analyse des Acemoglu-Pischke-Modells mit Daten des IAB-Betriebspanels (Wage structure bias and company training : empirical analysis of ," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(2), pages 189-204.
    4. Korpi, Tomas & Mertens, Antje, 2002. "Training systems and labor mobility: A comparison between Germany and Sweden," SFB 373 Discussion Papers 2002,19, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    5. Zwick, Thomas, 2007. "Apprenticeship training in Germany - investment or productivity driven?," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(2/3), pages 193-204.
    6. Andrew Sharpe & James Gibson, 2005. "The Apprenticeship System in Canada: Trends and Issues," CSLS Research Reports 2005-04, Centre for the Study of Living Standards.
    7. Regula Geel & Johannes Mure & Uschi Backes-Gellner, 2011. "Specificity of occupational training and occupational mobility: an empirical study based on Lazear’s skill-weights approach," Education Economics, Taylor & Francis Journals, vol. 19(5), pages 519-535, January.
    8. Gersbach, Hans & Schmutzler, Armin, 2005. "The Effects of Globalization on Worker Training," CEPR Discussion Papers 4879, C.E.P.R. Discussion Papers.
    9. Beckmann, Michael, 2002. "Lohnstrukturverzerrung und betriebliche Ausbildung : empirische Analyse des Acemoglu-Pischke-Modells mit Daten des IAB-Betriebspanels (Wage structure bias and company training : empirical analysis of ," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(2), pages 189-204.
    10. Zwick, Thomas, 2007. "Apprenticeship training in Germany - investment or productivity driven?," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(2/3), pages 193-204.
    11. Zwick, Thomas, 2007. "Apprenticeship training in Germany - investment or productivity driven?," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(2/3), pages 193-204.
    12. Clark, Damon, 2002. "Matching, Screening and Firm Investment in General Training: Theory and Evidence," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 A2-4, International Conferences on Panel Data.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rob Euwals & Rainer Winkelmann, 2004. "Training intensity and first labor market outcomes of apprenticeship graduates," International Journal of Manpower, Emerald Group Publishing Limited, vol. 25(5), pages 447-462, July.
    2. Dietrich, Hans & Gerner, Hans-Dieter, 2007. "The determinants of apprenticeship training with particular reference to business expectations," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(2/3), pages 221-233.
    3. Dietrich, Hans & Gerner, Hans-Dieter, 2007. "The determinants of apprenticeship training with particular reference to business expectations," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(2/3), pages 221-233.
    4. Beckmann, Michael, 2002. "Lohnstrukturverzerrung und betriebliche Ausbildung : empirische Analyse des Acemoglu-Pischke-Modells mit Daten des IAB-Betriebspanels (Wage structure bias and company training : empirical analysis of ," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(2), pages 189-204.
    5. Beckmann, Michael, 2002. "Lohnstrukturverzerrung und betriebliche Ausbildung : empirische Analyse des Acemoglu-Pischke-Modells mit Daten des IAB-Betriebspanels (Wage structure bias and company training : empirical analysis of ," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(2), pages 189-204.
    6. Dietrich, Hans & Gerner, Hans-Dieter, 2007. "The determinants of apprenticeship training with particular reference to business expectations," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(2/3), pages 221-233.
    7. Mohrenweiser, Jens & Zwick, Thomas, 2009. "Why do firms train apprentices? The net cost puzzle reconsidered," Labour Economics, Elsevier, vol. 16(6), pages 631-637, December.
    8. Zwick, Thomas, 2007. "Apprenticeship training in Germany - investment or productivity driven?," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(2/3), pages 193-204.
    9. Picchio, Matteo & van Ours, Jan C., 2011. "Market imperfections and firm-sponsored training," Labour Economics, Elsevier, vol. 18(5), pages 712-722, October.
    10. Eberhard Feess & Gerd Mühlheußer, 2002. "Economic Consequences of Transfer Fee Regulations in European Football," European Journal of Law and Economics, Springer, vol. 13(3), pages 221-237, May.
    11. Miriam Rinawi & Uschi Backes-Gellner, 2020. "Firms’ method of pay and the retention of apprentices," Oxford Economic Papers, Oxford University Press, vol. 72(1), pages 269-291.
    12. O'Higgins, Niall, 2001. "Youth unemployment and employment policy: a global perspective," MPRA Paper 23698, University Library of Munich, Germany.
    13. Zwick, Thomas, 2007. "Apprenticeship training in Germany - investment or productivity driven?," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(2/3), pages 193-204.
    14. Samuel Muehlemann & Juerg Schweri & Rainer Winkelmann & Stefan C. Wolter, 2005. "A Structural Model of Demand for Apprentices," CESifo Working Paper Series 1417, CESifo.
    15. Boom, Anette, 2005. "Firms' investments in general training and the skilled labour market," Labour Economics, Elsevier, vol. 12(6), pages 781-805, December.
    16. Gersbach, Hans & Schmutzler, Armin, 2005. "The Effects of Globalization on Worker Training," CEPR Discussion Papers 4879, C.E.P.R. Discussion Papers.
    17. Daniel Dietz & Thomas Zwick, 2016. "The retention effect of training – portability, visibility, and credibility," Economics of Education Working Paper Series 0113, University of Zurich, Department of Business Administration (IBW).
    18. Samuel Muehlemann & Juerg Schweri & Rainer Winkelmann & Stefan C. Wolter, 2007. "An Empirical Analysis of the Decision to Train Apprentices," LABOUR, CEIS, vol. 21(3), pages 419-441, September.
    19. Paul Ryan, 2001. "The School-to-Work Transition: A Cross-National Perspective," Journal of Economic Literature, American Economic Association, vol. 39(1), pages 34-92, March.
    20. Stefan Bender & Till von Wachter, 2006. "In the Right Place at the Wrong Time: The Role of Firms and Luck in Young Workers' Careers," American Economic Review, American Economic Association, vol. 96(5), pages 1679-1705, December.

    More about this item

    Keywords

    wages; job-duration; Training;
    All these keywords.

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp319. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.