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Journal cover: International Journal of Manpower

International Journal of Manpower

ISSN: 0143-7720

Online from: 1980

Subject Area: Economics

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Apprenticeship training: for investment or substitution?

Document Information:
Title:Apprenticeship training: for investment or substitution?
Author(s):Jens Mohrenweiser, (University of Zurich and Swiss Leading House on Economics of Education: Firm Behavior and Training Policies, Zurich, Switzerland), Uschi Backes-Gellner, (University of Zurich and Swiss Leading House on Economics of Education: Firm Behavior and Training Policies, Zurich, Switzerland)
Citation:Jens Mohrenweiser, Uschi Backes-Gellner, (2010) "Apprenticeship training: for investment or substitution?", International Journal of Manpower, Vol. 31 Iss: 5, pp.545 - 562
Keywords:Apprenticeships, Human capital, Training
Article type:Research paper
DOI:10.1108/01437721011066353 (Permanent URL)
Publisher:Emerald Group Publishing Limited
Acknowledgements:This research is funded by the Swiss Federal Office for Professional Education and Technology through its Leading House on Economics of Education: Firm Behaviour and Training Policies. The authors thank Bernd Frick, Matthias Kräkel, Paul Marginson, Kerstin Pull, the referees and especially Thomas Zwick and the participants of the Economics of Education seminar at the University of Zürich, Fall term 2007, and the Personalökonomisches Kolloquium at Bonn, March 2008, for important comments. They are also grateful to Yvonne Herzog for research assistance and to the Forschungsdatenzentrum of the Bundesagentur für Arbeit – and especially Dana Müller – for being helpful with the data and Günter Walden for providing data for the cost benefit study.

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.

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