Working Paper: CEPR ID: DP2880
Authors: Rob Euwals; Rainer Winkelmann
Abstract: The apprenticeship system is the most important source of formal post-secondary training in Germany. Our Paper contributes to the ongoing debate as to why firms are willing to invest in such training even though many apprentices will leave the training firm soon after completion of the apprenticeship. A particular advantage over previous empirical studies is that we use German register data, the IAB Employment Sample, which gives us a large sample size, and which gives us detailed information on occupations. We find that apprentices staying with their training firm after graduation have (1) higher wages and (2) longer first-job durations than apprentices leaving the training firm. These results support theories according to which firms use the apprenticeship system to select and retain the more able apprentices, thereby recouping the costs of investing in skills that are portable in principle.
Keywords: job duration; training; wages
JEL Codes: C24; C41; J24; J31; J44
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| apprentices who remain with their training firm after graduation (stayers) (M53) | higher wages than those who move to different firms (movers) (J62) |
| stayers (C41) | longer first job durations compared to movers (J69) |
| larger firms (L25) | higher wages for stayers (J31) |
| larger firms (L25) | longer job durations for stayers (C41) |