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The Costs of Recruiting Apprentices: Evidence from German Firm-Level Data

Samuel Muehlemann (), Harald Pfeifer () and Felix Wenzelmann ()
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Felix Wenzelmann: Federal Institute for Vocational Education and Training (BIBB) Bonn

No 95, Economics of Education Working Paper Series from University of Zurich, Department of Business Administration (IBW)

Abstract: In this paper, we use firm-level data to analyse a firm's costs of recruiting apprentices in Germany. We find that recruitment costs amount on average to 600 Euros per hire (approximately one month of apprentice pay or 1-2 per cent of a firm’s training expenditures), but costs are heterogeneous across firms and vary strongly with the training occupation. Our results suggest that shortages in the local supply of apprentices and a high degree of competition among training firms in the region increase recruitment costs. Furthermore, we find that firms with a works council or an investment-oriented training strategy incur higher recruitment costs. Finally, marginal recruitment costs first increase but eventually decrease for firms hiring a large number of apprentices. Our results are important in light of the increasing firm competition for talented school leavers induced by demographic change.

Keywords: Recruitment costs; apprenticeship training; human capital investment; local labour markets; local training markets; demographic change (search for similar items in EconPapers)
JEL-codes: J24 J32 J63 M53 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013-12, Revised 2015-11
New Economics Papers: this item is included in nep-bec, nep-eur, nep-hrm, nep-lab and nep-lma
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