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Supply Shocks in the Market for Apprenticeship Training

Samuel Muehlemann, Hans Dietrich, Gerard Pfann and Harald Pfeifer ()

Economics of Education Review, 2022, vol. 86, issue C

Abstract: We present a model with heterogeneous inputs and constant elasticity of substitution to examine the possible effects of a supply shock in the market for apprenticeship training. The model’s predictions are tested using data from a German high school reform that led to a one-time increase in the supply of highly educated apprentices. A difference-in-differences estimation strategy exploits regional variation in the timing of implementation, and an instrumental variable approach identifies the supply shock effects. We find that apprenticeship contracts among individuals with a high school degree increased by 7%, while apprentice wages were unaffected by the supply shock. Moreover, we find no evidence of substitution effects, as the number of training contracts among individuals with a lower-level school degree did not decrease. Our model predicts that such effects may occur when wages are sticky for apprentices with a high level of education relative to their productivity, which signals inefficiencies in the market for apprenticeship training.

Keywords: Apprenticeship market; Labor supply shock; School reform; Wage rigidity (search for similar items in EconPapers)
Date: 2022
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Working Paper: Supply Shocks in the Market for Apprenticeship Training (2020) Downloads
Working Paper: Supply shocks in the market for apprenticeship training (2020) Downloads
Working Paper: Supply shocks in the market for apprenticeship training (2020) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecoedu:v:86:y:2022:i:c:s0272775721001126

DOI: 10.1016/j.econedurev.2021.102197

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