The Role of Vocational Training in Addressing Skilled Labor Shortages

Henrika Langen

No 238, Economics of Education Working Paper Series from University of Zurich, Department of Business Administration (IBW)

Abstract: This study examines the relationship between state- and occupation-specific skilled labor shortages and firms' involvement in apprenticeship training in Germany. It focuses on four dimensions of apprenticeship activity: demand for apprentices, qualification requirements, new apprentice hires, and contract terminations during the probationary period. Skilled labor shortages are measured primarily using the ratio of unemployed skilled jobseekers to job vacancies, with the skilled-labor-shortage indicator from the Federal Employment Agency serving as an alternative measure. Involvement in apprenticeship training is measured using administrative data. The study uses a two-way fixed effects model that exploits within state x occupation changes in shortage intensity over time, complemented by a robust estimator for continuous treatment changes. The results suggest that shortages are linked to greater apprentice demand, more hires, and a shift away from recruiting applicants with higher school-leaving qualifications. The results further point to fewer contract terminations during the probationary period when shortages intensify, although this result is sensitive to the shortage measure used. Moreover, the analysis reveals significant differences across occupations in how firms adjust their apprenticeship practices.

Keywords: skilled labor shortages; Vocational Education and Training (VET); Firm Training Behavior (search for similar items in EconPapers)
JEL-codes: J63 M53 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2025-03
New Economics Papers: this item is included in nep-lab and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:iso:educat:0238

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