Working Paper: CEPR ID: DP1311
Authors: Dietmar Harhoff; Thomas J. Kane
Abstract: Advocates of apprenticeship programmes often argue as if it is simply a matter of historical accident that such investment by US firms has been hindered. This paper explores the structure of incentives underpinning the German system of apprenticeship training. First, we describe three characteristics of the German labour market that might lead firms to accept part of the cost of general training, even in the face of worker turnover. In the second part of the paper, we compare labour market outcomes for apprentices in Germany and high school graduates in the United States. Apprentices in Germany occupy a similar station within the German wage structure as that held by high school graduates in the US labour market. Finally, we provide evidence that the problem of forming labour market bonds is particularly acute for minority groups ? in Germany as well as in the United States. We discuss some implications for the vocational training debate in the United States
Keywords: labour market; employment; apprenticeship training; human capital
JEL Codes: J24; J31; O51; O52; P52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| German apprenticeship system incentives (J24) | firms financing general training (M53) |
| union collusion and restricted mobility (J51) | German apprenticeship system incentives (J24) |
| union ability to limit poaching (J58) | firms investing in apprentices (J24) |
| high firing costs and industry-wide wage agreements (L11) | value for information regarding worker productivity (J29) |
| value for information regarding worker productivity (J29) | firms subsidizing apprenticeship training (M53) |
| unobserved heterogeneity in worker mobility costs (J69) | firms' decisions to train apprentices (J24) |
| fewer competing firms (L19) | firms are more likely to train (M53) |