So Similar and Yet so Different: A Comparative Analysis of a Firm's Cost and Benefits of Apprenticeship Training in Austria and Switzerland

41 Pages Posted: 23 Oct 2017

See all articles by Luca Moretti

Luca Moretti

University of Bern

Martin Mayerl

Austrian Institute for Research on Vocational Training (OIBF)

Samuel Muehlemann

University of Bern

Peter Schlögl

Alpen-Adria-University Klagenfurt

Stefan C. Wolter

Swiss Coordination Centre for Research in Education (SKBF); University of Bern - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

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Abstract

The authors compare a firm's costs and benefits of providing apprenticeship training in Austria and Switzerland, using two original micro data sets. While both countries share a number of similarities, including an extensive vocational education and training (VET) system, and a common border, there are some important institutional differences. On average, a Swiss firm generates a net profit of 3400 Euro per apprentice and per year of training, while an Austrian firm incurs net costs of 4200 Euro. Applying matching models, we find that this difference is largely driven by a higher relative apprentice pay in Austria, which in turn is associated with collective bargaining agreements and competition with alternative school-based VET pathways. However, Austrian firms can still generate a return on their training investment, partly due to wage subsidies, but mostly by retaining a high share of apprentices as skilled workers, and thereby save on future hiring costs.

Keywords: apprenticeship training, cost-benefit analysis, initial VET, hiring costs

JEL Classification: J24, J31, J44

Suggested Citation

Moretti, Luca and Mayerl, Martin and Mühlemann, Samuel and Schlögl, Peter and Wolter, Stefan C., So Similar and Yet so Different: A Comparative Analysis of a Firm's Cost and Benefits of Apprenticeship Training in Austria and Switzerland. IZA Discussion Paper No. 11081. Available at SSRN: https://ssrn.com/abstract=3056619

Luca Moretti (Contact Author)

University of Bern

Martin Mayerl

Austrian Institute for Research on Vocational Training (OIBF) ( email )

Margaretenstr. 166/2nd floor
Vienna, 1050
Austria

Samuel Mühlemann

University of Bern ( email )

Gesellschaftstrasse 49
Bern, CH-3012
Switzerland

Peter Schlögl

Alpen-Adria-University Klagenfurt ( email )

Universitätsstrasse 65-67
Klagenfurt, Corinthia A-9020
Austria

Stefan C. Wolter

Swiss Coordination Centre for Research in Education (SKBF) ( email )

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Switzerland
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+41 62 835 23 99 (Fax)

HOME PAGE: http://www.skbf-csre.ch

University of Bern - Department of Economics ( email )

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Switzerland
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CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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