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Why do firms train apprentices? The net cost puzzle reconsidered

Jens Mohrenweiser () and Thomas Zwick ()

Labour Economics, 2009, vol. 16, issue 6, 631-637

Abstract: This paper analyses the impact of increasing the share of apprentices at the cost of the share of unskilled or semi-skilled employees on establishment performance. We use representative matched employer-employee panel data and correct for estimation biases. We show that an increase of the apprentice share in trade, commercial, craft or construction occupations has a positive impact on establishment performance. Establishments that increase the apprentice share in manufacturing occupations face a negative impact on performance, however. These results shed a new light on the stylised fact that apprenticeship training always leads to net costs during the apprenticeship period in Germany: we argue that establishments only hire apprentices at a cost if their skills are relatively specific, their retention rate is high and skilled employees are hard to hire.

Keywords: Apprenticeship; training; Performance; Panel; estimation (search for similar items in EconPapers)
Date: 2009
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Related works:
Working Paper: Why do Firms Train Apprentices? The Net Cost Puzzle Reconsidered (2008) Downloads
Working Paper: Why Do Firms Train Apprentices? The Net Cost Puzzle Reconsidered (2008) Downloads
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