How Negative Labor Supply Shocks Affect Training in Firms: Lessons from Opening the Swiss-German Border

Caroline Neuber-Pohl (), Damiano Pregaldini (), Uschi Backes-Gellner, Sandra Dummert () and Harald Pfeifer
Additional contact information
Caroline Neuber-Pohl: BIBB
Damiano Pregaldini: University of Zurich
Sandra Dummert: Institute for Employment Research (IAB), Nuremberg

No 16652, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: By exploiting a labor market reform causing an outflow of German workers to Switzerland, we examine the effect of negative labor supply shocks on training in firms using the market for apprenticeships as an example. Analysis of administrative data reveals that the reform led to more apprentices in German firms despite a decrease in apprentice wages. This can be explained by a standard two-factor production model where firms substitute outflowing skilled workers with more apprentices; setting lower wages is possible because of a rising supply of apprentices owing to substantially improved employment prospects after border openings.

Keywords: negative labor supply shock; training effects after worker outflow; wage effects; training incentives; apprenticeship training supply and demand (search for similar items in EconPapers)
JEL-codes: J21 J22 J61 R23 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2023-12
New Economics Papers: this item is included in nep-int, nep-lab and nep-ure
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Working Paper: How negative labor supply shocks affect training in firms: Lessons from opening the Swiss-German border (2023)
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