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 how regional and occupation-specific skilled labor shortages influence companies' involvement in apprenticeship training. It explores the relationship between skilled labor shortages and demand for apprentices, qualification requirements, new apprentices hired, and premature contract terminations in Germany. Skilled labor shortages are measured using the ratio of unemployed skilled jobseekers to job vacancies and a skilled labor shortage indicator from the Federal Employment Agency. Involvement in apprenticeship training is measured using administrative data on apprenticeship contracts. To estimate the relationship between skilled labor shortages and apprenticeship activities, the study uses a two-way fixed effects model and a robust difference-in-differences approach. The findings show that skilled labor shortages is associated with higher demand for apprentices and more hires, with companies more likely to recruit apprentices with lower qualifications. However, the association between skilled labor shortages and premature contract terminations remains unclear. The analysis further reveals significant differences across occupations in how companies adjust their apprenticeship practices.

Keywords: skilled labor shortages; Vocational Education and Training (VET); firm behavior (search for similar items in EconPapers)
Pages: 41 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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