IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp9806.html
   My bibliography  Save this paper

Size of Training Firms: The Role of Firms, Luck, and Ability in Young Workers' Careers

Author

Listed:
  • Müller, Steffen

    (IWH Halle)

  • Neubäumer, Renate

    (University of Koblenz-Landau)

Abstract

This paper analyzes how life-cycle unemployment of former apprentices depends on the size of the training firm. We start from the hypotheses that the size of training firms reduces long-run cumulated unemployment exposure, e.g. via differences in training quality and in the availability of internal labor markets, and that the access to large training firms depends positively on young workers' ability and their luck to live in a region with many large and medium-sized training firms. We test these hypotheses empirically by using a large administrative data set for Germany and find corroborative evidence.

Suggested Citation

  • Müller, Steffen & Neubäumer, Renate, 2016. "Size of Training Firms: The Role of Firms, Luck, and Ability in Young Workers' Careers," IZA Discussion Papers 9806, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9806
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp9806.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. Walter Y. Oi & Todd L. Idson, 1999. "Workers Are More Productive in Large Firms," American Economic Review, American Economic Association, vol. 89(2), pages 104-108, May.
    3. James Heckman & Flavio Cunha, 2007. "The Technology of Skill Formation," American Economic Review, American Economic Association, vol. 97(2), pages 31-47, May.
    4. 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.
    5. Richard B. Freeman & David A. Wise, 1982. "The Youth Labor Market Problem: Its Nature, Causes, and Consequences," NBER Books, National Bureau of Economic Research, Inc, number free82-1.
    6. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    7. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute of Labor Economics (IZA).
    8. Möller Joachim & Umkehrer Matthias, 2015. "Are there Long-Term Earnings Scars from Youth Unemployment in Germany?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(4-5), pages 474-498, August.
    9. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 411-482, July.
    10. 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.
    11. Garen, John E, 1985. "Worker Heterogeneity, Job Screening, and Firm Size," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 715-739, August.
    12. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863, Elsevier.
    13. Lynch, Lisa M. (ed.), 1994. "Training and the Private Sector," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226498102, August.
    14. Daniel Fackler & Claus Schnabel & Joachim Wagner, 2013. "Establishment exits in Germany: the role of size and age," Small Business Economics, Springer, vol. 41(3), pages 683-700, October.
    15. 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.
    16. Gregg, Paul, 2001. "The Impact of Youth Unemployment on Adult Unemployment in the NCDS," Economic Journal, Royal Economic Society, vol. 111(475), pages 626-653, November.
    17. 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.
    18. Schmillen, Achim & Umkehrer, Matthias, 2013. "The scars of youth : effects of early-career unemployment on future unemployment experience," IAB-Discussion Paper 201306, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    19. Lisa M. Lynch, 1994. "Training and the Private Sector: International Comparisons," NBER Books, National Bureau of Economic Research, Inc, number lync94-1.
    20. Zwick Thomas & Mohrenweiser Jens, 2015. "Youth Unemployment After Apprenticeship Training and Individual, Occupation, and Training Employer Characteristics," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(4-5), pages 418-432, August.
    21. Rainer Winkelmann, 1996. "Employment Prospects and Skill Acquisition of Apprenticeship-Trained Workers in Germany," ILR Review, Cornell University, ILR School, vol. 49(4), pages 658-672, July.
    22. Lindley, Robert M, 1975. "The Demand for Apprentice Recruits by the Engineering Industry, 1951-71," Scottish Journal of Political Economy, Scottish Economic Society, vol. 22(1), pages 1-24, February.
    23. Thomas A. Mroz & Timothy H. Savage, 2006. "The Long-Term Effects of Youth Unemployment," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).
    24. David N. F. Bell & David G. Blanchflower, 2011. "Young people and the Great Recession," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 27(2), pages 241-267.
    25. David Soskice, 1994. "Reconciling Markets and Institutions: The German Apprenticeship System," NBER Chapters, in: Training and the Private Sector: International Comparisons, pages 25-60, National Bureau of Economic Research, Inc.
    26. Lucia Foster & John Haltiwanger & Chad Syverson, 2008. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," American Economic Review, American Economic Association, vol. 98(1), pages 394-425, March.
    27. Paul Ryan, 2001. "The School-to-Work Transition: A Cross-National Perspective: Corrigendum," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 767-767, September.
    28. Kathrin Göggel & Thomas Zwick, 2012. "Heterogeneous Wage Effects of Apprenticeship Training," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(3), pages 756-779, September.
    29. Schmillen, Achim & Möller, Joachim, 2012. "Distribution and determinants of lifetime unemployment," Labour Economics, Elsevier, vol. 19(1), pages 33-47.
    30. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    31. Flavio Cunha & James J. Heckman, 2008. "Formulating, Identifying and Estimating the Technology of Cognitive and Noncognitive Skill Formation," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    32. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    33. Freeman, Richard B. & Wise, David A. (ed.), 1982. "The Youth Labor Market Problem," National Bureau of Economic Research Books, University of Chicago Press, number 9780226261614, August.
    34. Reich, Michael & Gordon, David M & Edwards, Richard C, 1973. "A Theory of Labor Market Segmentation," American Economic Review, American Economic Association, vol. 63(2), pages 359-365, May.
    35. Barron, John M & Black, Dan A & Loewenstein, Mark A, 1987. "Employer Size: The Implications for Search, Training, Capital Investment, Starting Wages, and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 5(1), pages 76-89, January.
    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. Elena Ashtari Tafti & Mimosa Distefano & Tetyana Surovtseva, 2024. "Gender, careers and peers' gender mix," CEP Discussion Papers dp2008, Centre for Economic Performance, LSE.

    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. Müller, Steffen & Neubäumer, Renate, 2016. "Size of Training Firms and Cumulated Long-run Unemployment Exposure – The Role of Firms, Luck, and Ability in Young Workers’ Careers," IWH Discussion Papers 5/2016, Halle Institute for Economic Research (IWH).
    2. Neubäumer, Renate Ingrid & Müller, Steffen, 2015. "Size of Training Firms and Long-Run Unemployment The Role of Firms, Luck and Ability in Young Workers Careers," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112923, Verein für Socialpolitik / German Economic Association.
    3. Schmillen, Achim & Umkehrer, Matthias, 2013. "The scars of youth : effects of early-career unemployment on future unemployment experience," IAB-Discussion Paper 201306, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Möller Joachim & Umkehrer Matthias, 2015. "Are there Long-Term Earnings Scars from Youth Unemployment in Germany?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(4-5), pages 474-498, August.
    5. Regina T. Riphahn & Michael Zibrowius, 2015. "Apprenticeship, Vocational Training and Early Labor Market Outcomes - in East and West Germany," SOEPpapers on Multidisciplinary Panel Data Research 743, DIW Berlin, The German Socio-Economic Panel (SOEP).
    6. Regina T. Riphahn & Michael Zibrowius, 2013. "Apprenticeship Training and Early Labor Market Outcomes in East and West Germany," Working Papers 136, Bavarian Graduate Program in Economics (BGPE).
    7. 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.
    8. Matthias Umkehrer, 2019. "The impact of declining youth employment stability on future wages," Empirical Economics, Springer, vol. 56(2), pages 619-650, February.
    9. Josef Fersterer & Jörn‐Steffen Pischke & Rudolf Winter‐Ebmer, 2008. "Returns to Apprenticeship Training in Austria: Evidence from Failed Firms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(4), pages 733-753, December.
    10. Zwick Thomas & Mohrenweiser Jens, 2015. "Youth Unemployment After Apprenticeship Training and Individual, Occupation, and Training Employer Characteristics," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(4-5), pages 418-432, August.
    11. Rune V. Lesner & Anna Piil Damm & Preben Bertelsen & Mads Uffe Pedersen, 2018. "Life Skills Development of Teenagers through Spare-Time Jobs," Economics Working Papers 2018-09, Department of Economics and Business Economics, Aarhus University.
    12. Umkehrer, Matthias, 2015. "The impact of changing youth employment patterns on future wages," IAB-Discussion Paper 201531, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    13. Goeggel, Kathrin & Zwick, Thomas, 2009. "Good occupation - bad occupation? The quality of apprenticeship training," ZEW Discussion Papers 09-024, ZEW - Leibniz Centre for European Economic Research.
    14. Daniel Gladwell & Gurleen Popli & Aki Tsuchiya, 2015. "A Dynamic Analysis of Skill Formation and NEET status," Working Papers 2015016, The University of Sheffield, Department of Economics.
    15. Ludger Wößmann, 2008. "Efficiency and equity of European education and training policies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(2), pages 199-230, April.
    16. Marco Manacorda & Furio Camillo Rosati & Marco Ranzani & Giuseppe Dachille, 2017. "Pathways from school to work in the developing world," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-40, December.
    17. O'Higgins, Niall, 2001. "Youth unemployment and employment policy: a global perspective," MPRA Paper 23698, University Library of Munich, Germany.
    18. Wagner, Robert & Wolf, Maximilian, 2013. "What drives the intention of Bavarian crafts apprentices to change employer or occupation? : an empirical study in the crafts sector," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 46(1), pages 43-60.
    19. 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.
    20. Gianni De Fraja & Sara Lemos & James Rockey, 2021. "The Wounds That Do Not Heal: The Lifetime Scar of Youth Unemployment," Economica, London School of Economics and Political Science, vol. 88(352), pages 896-941, October.

    More about this item

    Keywords

    young workers; apprenticeship; training; unemployment; mobility; firm size;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

    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:dp9806. 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.