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Apprenticeship training: for investment or substitution?

Author

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  • Jens Mohrenweiser
  • Uschi Backes‐Gellner
Abstract
Purpose - The purpose of this paper is to derive an empirical method to identify different types of training strategies of companies based on publicly available company data. Design/methodology/approach - Using a ten‐year panel, the within‐firm retention rate, defined as the average proportion of apprentices staying in a company in relation to all apprenticeship graduates of a company over several years, was analyzed. The within‐firm retention rate is used to identify these companies' training strategies. Findings - It was shown that companies' motivation for apprenticeship training in Germany is not homogeneous: 19 percent of all companies follow a substitution strategy and 44 percent follow an investment strategy. The determinants of the substitution strategy were estimated and, for example, sizeable differences were found between sectors with different skill requirements and between firms' coverage of industrial relations. Research limitations/implications - The method is well suited to classify substitution‐motivated training firms but it is less precise in identifying the investment motivation. Moreover, very small firms which train only one apprentice need longer panel duration for precise results and therefore the classification results are less precise for very small firms. Practical implications - The classification can be used to identify determinants of company participation in apprenticeship training and to predict changes in demand for apprentices. Originality/value - A simple and innovative method of identifying different types of training motivation with publicly available company data was derived, which has so far been possible only with very detailed company‐specific apprenticeship surveys.

Suggested Citation

  • Jens Mohrenweiser & Uschi Backes‐Gellner, 2010. "Apprenticeship training: for investment or substitution?," International Journal of Manpower, Emerald Group Publishing Limited, vol. 31(5), pages 545-562, August.
    • Handle: RePEc:eme:ijmpps:v:31:y:2010:i:5:p:545-562
    DOI: 10.1108/01437721011066353
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    References listed on IDEAS

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    1. Wolter, Stefan C. & Ryan, Paul, 2011. "Apprenticeship," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 3, chapter 11, pages 521-576, Elsevier.
    2. Mohrenweiser, Jens & Zwick, Thomas, 2009. "Why do firms train apprentices? The net cost puzzle reconsidered," Labour Economics, Elsevier, vol. 16(6), pages 631-637, December.
    3. Zwick, Thomas, 2007. "Apprenticeship training in Germany - investment or productivity driven?," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(2/3), pages 193-204.
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    14. Schwerdt, Wolfgang & Bender, Stefan, 2003. "Was tun Lehrlinge nach ihrer Ausbildung? : eine Analyse mit dem Linked Employer-Employee-Datensatz des IAB (What do apprentices do after their training? : an analysis using the IAB Linked Employer-Emp," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(1), pages 46-59.
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    Citations

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    Cited by:

    1. Mohrenweiser, Jens, 2016. "Recruitment and apprenticeship training," Industrielle Beziehungen - Zeitschrift fuer Arbeit, Organisation und Management - The German Journal of Industrial Relations, Rainer Hampp Verlag, vol. 23(1), pages 6-24.
    2. Katja Seidel, 2016. "Job Characteristics and their Effect on the Intention to Quit Apprenticeship," Working Paper Series in Economics 362, University of Lüneburg, Institute of Economics.
    3. Zwick Thomas & Mohrenweiser Jens, 2015. "Youth Unemployment After Apprenticeship Training and Individual, Occupation, and Training Employer Characteristics," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(4-5), pages 418-432, August.
    4. Harald Pfeifer & Uschi Backes-Gellner, 2017. "Another piece of the puzzle: Firms' investment in training as optimization of skills inventory," Economics of Education Working Paper Series 0136, University of Zurich, Department of Business Administration (IBW), revised Jun 2018.
    5. Felix Wenzelmann, 2012. "Ausbildungsmotive und die Zeitaufteilung der Auszubildenden im Betrieb," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(2), pages 125-145, July.
    6. Miriam Rinawi & Uschi Backes-Gellner, 2020. "Firms’ method of pay and the retention of apprentices," Oxford Economic Papers, Oxford University Press, vol. 72(1), pages 269-291.
    7. Hinz, Tina, 2016. "Personnel policy adjustments when apprentice positions are unfilled: Evidence from German establishment data," Discussion Papers 99, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    8. Jens Mohrenweiser & Thomas Zwick & Uschi Backes‐Gellner, 2019. "Poaching and Firm‐Sponsored Training," British Journal of Industrial Relations, London School of Economics, vol. 57(1), pages 143-181, March.
    9. Fabian Busch & Robert Fenge & Carsten Ochsen, 2021. "Do Firms Hire More Older Workers? Evidence from Germany," CESifo Working Paper Series 9219, CESifo.
    10. Paul Ryan, 2011. "Apprenticeship: between theory and practice, school and workplace," Economics of Education Working Paper Series 0064, University of Zurich, Department of Business Administration (IBW), revised Oct 2011.
    11. Menze, Laura, 2017. "Horizontale und vertikale Adäquanz im Anschluss an die betriebliche Ausbildung in Deutschland. Zur Bedeutung von Merkmalen des Ausbildungsberufs [Horizontal and vertical matches after apprenticeshi," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 69(1), pages 79-107.
    12. Felix Wenzelmann, 2012. "Ausbildungsmotive und die Zeitaufteilung der Auszubildenden im Betrieb [Training motives and the allocation of productive tasks in apprenticeship training in Germany]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(2), pages 125-145, July.
    13. Jahn, Vera, 2017. "The Importance of Mittelstand Firms for Regional Apprenticeship Activity," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168260, Verein für Socialpolitik / German Economic Association.
    14. Carolin Linckh & Caroline Neuber-Pohl & Harald Pfeifer, 2023. "The employment effects of raising negotiated minimum wages for apprentices," Economics of Education Working Paper Series 0202, University of Zurich, Department of Business Administration (IBW).
    15. Thomsen, Stephan L. & Trunzer, Johannes, 2020. "Did the Bologna Process Challenge the German Apprenticeship System? Evidence from a Natural Experiment," IZA Discussion Papers 13806, Institute of Labor Economics (IZA).
    16. Jansen, A., 2016. "Is investing in apprentices related to decision-makers’ altruism and their high time preference?," Research Memorandum 010, Maastricht University, Graduate School of Business and Economics (GSBE).
    17. Aepli, Manuel & Kuhn, Andreas, 2021. "Open labor markets and Firms’ substitution between training apprentices and hiring workers," Labour Economics, Elsevier, vol. 70(C).
    18. Sofie Cabus & Eszter Nagy, 2017. "Performance of Hungarian firms: are apprentices an asset or a liability? Evidence from a unique matched employer-employee dataset," Budapest Working Papers on the Labour Market 1706, Institute of Economics, Centre for Economic and Regional Studies.
    19. Jansen, A., 2016. "Is investing in apprentices related to decision-makers' altruism and their high time preference?," ROA Research Memorandum 002, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    20. Manuel Aepli & Andreas Kuhn, 2020. "Open Labor Markets and Firms' Substitution between Training Apprentices and Hiring Workers," Economics of Education Working Paper Series 0179, University of Zurich, Department of Business Administration (IBW).
    21. Mohrenweiser, Jens, 2022. "Works Councils," GLO Discussion Paper Series 1103, Global Labor Organization (GLO).
    22. Karlson, Nils & Persson, Kristine, 2015. "Effects of work-based learning on companies involved in VET education," Ratio Working Papers 258, The Ratio Institute.
    23. Aepli, Manuel & Kuhn, Andreas, 2019. "Open Labor Markets and Firms’ Substitution between Training Apprentices and Hiring Workers," IZA Discussion Papers 12479, Institute of Labor Economics (IZA).
    24. Sofie Cabus & Eszter Nagy, 2021. "On the productivity effects of training apprentices in Hungary: evidence from a unique matched employer–employee dataset," Empirical Economics, Springer, vol. 60(4), pages 1685-1718, April.

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