The effect of labor market regulations on training behavior and quality: the German labor market reform as a natural experiment

Anika Jansen, Mirjam Strupler Leiser, Felix Wenzelmann and Stefan Wolter
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Anika Jansen: German Federal Institute for Vocational Education and Training (BiBB), Bonn
Mirjam Strupler Leiser: University of Bern, Centre for Research in Economics of Education
Felix Wenzelmann: German Federal Institute for Vocational Education and Training (BiBB), Bonn

No 83, Economics of Education Working Paper Series from University of Zurich, Department of Business Administration (IBW)

Abstract: Labor market frictions are seen in many extensions of the classical human capital theory as a prerequisite for firms financing general training. The labor market reforms in Germany at the beginning of the millennium have therefore been seen by many as a danger to the firms’ willingness to support the apprenticeship training system. This paper analyzes the training strategies German firms deployed to cope with the greater labor market flexibility as a result of the labor market reform. Switzerland where no reforms had taken place serves as the counterfactual. The results show that firms successfully reduced the net-costs of training by involving apprentices in more work and reducing non-productive tasks, like practicing. Contrary to the widespread fear, this adapted training strategy resulted also in a substantial increase in work-related competencies and productivity of apprentices.

Keywords: Apprenticeship training; difference-in-differences matching estimator; cost-benefit; labor market reforms (search for similar items in EconPapers)
JEL-codes: C0 I20 J50 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2012-12
New Economics Papers: this item is included in nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:iso:educat:0083

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