The Effects of Supply Shocks in the Market for Apprenticeships: Evidence from a German High School Reform

Samuel Mühlemann (), Gerard A. Pfann (), Harald Pfeifer () and Hans Dietrich ()
Additional contact information
Samuel Mühlemann: University of Munich
Gerard A. Pfann: Maastricht University
Hans Dietrich: Institute for Employment Research (IAB), Nuremberg
Authors registered in the RePEc Author Service: Samuel Muehlemann ()

No 11264, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper studies the effects of the G8 high school reform in Germany. The reform reduced minimum duration to obtain a high school degree (Abitur) from 9 to 8 years. First, we present a simple model based on a CES technology with heterogeneous inputs to conjecture possible effects of a supply shock of high education apprenticeships. Implementation of the reform across states (Länder) has been realized in different years. A difference-in-differences estimation strategy is used to identify the effects of one-time supply shock in market for high-educated apprentices. Training firms almost fully and immediately absorbed the additional supply of high school graduates in the apprenticeship market. No evidence is found for substitution effects between low and high education apprenticeships. The model explains that these effects may be due to sticky and too low collectively bargained wages for high education apprenticeships relative to their productivity. This renders the market for apprenticeships inefficient.

Keywords: apprenticeship market; labor supply shock; G8 reform (search for similar items in EconPapers)
JEL-codes: I21 J20 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2018-01
New Economics Papers: this item is included in nep-edu, nep-eur, nep-lma and nep-ure
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Forthcoming - forthcoming as 'Supply Shocks in the Market for Apprenticeship Training' in: Economics of Education Review, 2021

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