IDEAS home Printed from https://ideas.repec.org/p/zbw/vfsc16/145655.html
   My bibliography  Save this paper

Vocational Schooling versus Apprenticeship Training. Evidence from Vacancy Data

Author

Listed:
  • Parey, Matthias

Abstract

How to best prepare non-college bound youth for the labor market? Different approaches compete in this field, including firm-based apprenticeships, full-time vocational schooling, and on-the-job learning. Little is known about how effective these methods are, and comparisons of means are uninformative due to the selection of individuals into different streams. In this paper, we exploit the idea that variation in apprenticeship availability affects the opportunities individuals have when they grow up. We present a small open economy model in which price shocks affect the local number of apprentices, without a differential effect on factor rewards; this motivates an instrumental variable strategy to compare labor market outcomes between labor types, which is implemented exploiting differences in training availability. We document how variation in vacancies for apprenticeships affects educational choice. We show that at the margin, individuals substitute between apprenticeship training and full-time school-based vocational training. We exploit this variation to study how this formation period affects later labor market outcomes at ages 23 to 26. Our results show that firm-based apprenticeship training leads to substantially lower unemployment rates; investigating this pattern over time, the evidence indicates that former apprentices have a transitory advantage which fades out over time. We do not find significant differences in wages. This suggests that these alternatives confer similar overall levels of productivity, and that apprenticeship training improves the early labor market attachment relative to vocational schooling. We investigate the responsiveness to negative shocks in an experiment based on firm closures. Our results are found to be robust in a number of specification checks, and we investigate the validity of our functional form in a semiparametric analysis.

Suggested Citation

  • Parey, Matthias, 2016. "Vocational Schooling versus Apprenticeship Training. Evidence from Vacancy Data," VfS Annual Conference 2016 (Augsburg): Demographic Change 145655, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc16:145655
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/145655/1/VfS_2016_pid_6604.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James J. Heckman & Vytlacil, Edward J., 2007. "Econometric Evaluation of Social Programs, Part II: Using the Marginal Treatment Effect to Organize Alternative Econometric Estimators to Evaluate Social Programs, and to Forecast their Effects in New," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 71, Elsevier.
    2. Findlay, Ronald & Kierzkowski, Henryk, 1983. "International Trade and Human Capital: A Simple General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 91(6), pages 957-978, December.
    3. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    4. Liliane Bonnal & Sylvie Mendes & Catherine Sofer, 2002. "School‐to‐work transition: apprenticeship versus vocational school in France," International Journal of Manpower, Emerald Group Publishing Limited, vol. 23(5), pages 426-442, August.
    5. Ernst R. Berndt & Zvi Griliches, 1993. "Price Indexes for Microcomputers: An Exploratory Study," NBER Chapters, in: Price Measurements and Their Uses, National Bureau of Economic Research, Inc.
    6. Daniel G. Sullivan & Till von Wachter, 2006. "Mortality, mass-layoffs, and career outcomes: an analysis using administrative data," Working Paper Series WP-06-21, Federal Reserve Bank of Chicago.
    7. Ofer Malamud & Cristian Pop-Eleches, 2008. "General Education vs. Vocational Training: Evidence from an Economy in Transition," NBER Working Papers 14155, National Bureau of Economic Research, Inc.
    8. Buettner Thiess & Rincke Johannes, 2007. "Labor Market Effects of Economic Integration: The Impact of Re-Unification in German Border Regions," German Economic Review, De Gruyter, vol. 8(4), pages 536-560, December.
    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. Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-529, October.
    11. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    12. Philip Oreopoulos & Marianne Page & Ann Huff Stevens, 2008. "The Intergenerational Effects of Worker Displacement," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 455-483, July.
    13. Goldin, Claudia, 2001. "The Human-Capital Century And American Leadership: Virtues Of The Past," The Journal of Economic History, Cambridge University Press, vol. 61(2), pages 263-292, June.
    14. Michel Sollogoub & Valérie Ulrich, 1999. "Les jeunes en apprentissage ou en lycée professionnel," Économie et Statistique, Programme National Persée, vol. 323(1), pages 31-52.
    15. Robinson, Peter M, 1988. "Root- N-Consistent Semiparametric Regression," Econometrica, Econometric Society, vol. 56(4), pages 931-954, July.
    16. Oosterbeek, Hessel & Webbink, Dinand, 2007. "Wage effects of an extra year of basic vocational education," Economics of Education Review, Elsevier, vol. 26(4), pages 408-419, August.
    17. Matthew Johnson & Michael P. Keane, 2013. "A Dynamic Equilibrium Model of the US Wage Structure, 1968-1996," Journal of Labor Economics, University of Chicago Press, vol. 31(1), pages 1-49.
    18. Christian Dustmann, 2004. "Parental background, secondary school track choice, and wages," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 209-230, April.
    19. Bernd Fitzenberger & Aderonke Osikominu & Robert Völter, 2006. "Imputation Rules to Improve the Education Variable in the IAB Employment Subsample," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(3), pages 405-436.
    20. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    21. James Heckman, 1993. "Assessing Clinton's Program on Job Training, Workfare, and Education in the Workplace," NBER Working Papers 4428, National Bureau of Economic Research, Inc.
    22. Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 439-479.
    23. repec:iab:iabfme:200503(en is not listed on IDEAS
    24. Bender, Stefan & Haas, Anette & Klose, Christoph, 2000. "IAB Employment Subsample 1975-1995 Opportunities for Analysis Provided by the Anonymised Subsample," IZA Discussion Papers 117, Institute of Labor Economics (IZA).
    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. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-338, May.
    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. Neyt, Brecht & Verhaest, Dieter & Baert, Stijn, 2020. "The impact of dual apprenticeship programmes on early labour market outcomes: A dynamic approach," Economics of Education Review, Elsevier, vol. 78(C).
    2. Corseuil, Carlos Henrique & Foguel, Miguel N. & Gonzaga, Gustavo, 2019. "Apprenticeship as a stepping stone to better jobs: Evidence from Brazilian matched employer-employee data," Labour Economics, Elsevier, vol. 57(C), pages 177-194.
    3. Chiara Cavaglia & Sandra McNally & Guglielmo Ventura, 2020. "Do Apprenticeships Pay? Evidence for England," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(5), pages 1094-1134, October.
    4. Leighton, Margaret & Speer, Jamin D., 2020. "Labor market returns to college major specificity," European Economic Review, Elsevier, vol. 128(C).
    5. Satinder Singh & Jajati K. Parida, 2022. "Employment and Earning Differentials Among Vocationally Trained Youth: Evidence from field studies in Punjab and Haryana in India," Millennial Asia, , vol. 13(1), pages 142-172, April.
    6. Ilse Tobback & Dieter Verhaest & Stijn Baert, 2020. "Student Access to Apprenticeships: Evidence from a Vignette Experiment," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(3), pages 435-465, July.
    7. repec:cep:cepisp:is03 is not listed on IDEAS

    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. Werner Eichhorst & Núria Rodríguez-Planas & Ricarda Schmidl & Klaus F. Zimmermann, 2015. "A Road Map to Vocational Education and Training in Industrialized Countries," ILR Review, Cornell University, ILR School, vol. 68(2), pages 314-337, March.
    2. 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.
    3. Jean-Marc Robin & Costas Meghir & Christian Dustmann & Jerome Adda, 2013. "Career Progression, Economic Downturns, and Skills," 2013 Meeting Papers 993, Society for Economic Dynamics.
    4. Daniel A. Kamhöfer & Hendrik Schmitz, 2013. "Analyzing Zero Returns to Education in Germany – Heterogeneous Eff ects and Skill Formation," Ruhr Economic Papers 0446, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. Puhani, Patrick A. & Weber, Andrea M., 2005. "Does the Early Bird Catch the Worm? Instrumental Variable Estimates of Educational Effects of Age of School Entry in Germany," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 25840, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    6. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    7. Daniel A. Kamhöfer & Hendrik Schmitz, 2013. "Analyzing Zero Returns to Education in Germany: Heterogeneous Effects and Skill Formation," SOEPpapers on Multidisciplinary Panel Data Research 598, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. 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.
    9. Hall, Caroline, 2013. "Does more general education reduce the risk of future unemployment? Evidence from labor market experiences during the Great Recession," Working Paper Series 2013:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    10. Hall, Caroline, 2016. "Does more general education reduce the risk of future unemployment? Evidence from an expansion of vocational upper secondary education," Economics of Education Review, Elsevier, vol. 52(C), pages 251-271.
    11. Jean-Marc Robin & Costas Meghir & Christian Dustmann & Jerome Adda, 2013. "Career Progression, Economic Downturns, and Skills," 2013 Meeting Papers 993, Society for Economic Dynamics.
    12. Patrick A. Puhani & Andrea M. Weber, 2007. "Persistence of the School Entry Age Effect in a System of Flexible Tracking," University of St. Gallen Department of Economics working paper series 2007 2007-30, Department of Economics, University of St. Gallen.
    13. Sönke Hendrik Matthewes & Guglielmo Ventura, 2022. "On Track to Success? Returns to vocational education against different alternatives," CVER Research Papers 038, Centre for Vocational Education Research.
    14. Corseuil, Carlos Henrique & Foguel, Miguel N. & Gonzaga, Gustavo, 2019. "Apprenticeship as a stepping stone to better jobs: Evidence from Brazilian matched employer-employee data," Labour Economics, Elsevier, vol. 57(C), pages 177-194.
    15. Sönke Hendrik Matthewes & Guglielmo Ventura, 2022. "On Track to Success? Returns to Vocational Education Against Different Alternatives," CEPA Discussion Papers 58, Center for Economic Policy Analysis.
    16. Biewen, Martin & (neé Tapalaga), Madalina Thiele, 2020. "Early tracking, academic vs. vocational training, and the value of ‘second-chance’ options," Labour Economics, Elsevier, vol. 66(C).
    17. Arthur Lewbel, 2019. "The Identification Zoo: Meanings of Identification in Econometrics," Journal of Economic Literature, American Economic Association, vol. 57(4), pages 835-903, December.
    18. repec:zbw:rwirep:0446 is not listed on IDEAS
    19. repec:hal:spmain:info:hdl:2441/27gcpqk7lh9jsrd5361jqsbt51 is not listed on IDEAS
    20. Katrine V. Løken & Magne Mogstad & Matthew Wiswall, 2012. "What Linear Estimators Miss: The Effects of Family Income on Child Outcomes," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 1-35, April.
    21. Heckman, James J. & Urzúa, Sergio, 2010. "Comparing IV with structural models: What simple IV can and cannot identify," Journal of Econometrics, Elsevier, vol. 156(1), pages 27-37, May.
    22. Yolanda Kodrzycki, 2007. "Using unexpected recalls to examine the long-term earnings effects of job displacement," Working Papers 07-2, Federal Reserve Bank of Boston.

    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    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:zbw:vfsc16:145655. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/vfsocea.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.