Are Apprenticeships Business Cycle Proof?

17 Pages Posted: 12 Mar 2018

See all articles by Samuel Lüthi

Samuel Lüthi

University of Bern

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

Abstract

Although there is evidence that apprenticeship training can ease the transition of youth into the labour market and thereby reduce youth unemployment, many policy makers fear that firms will cut their apprenticeship expenditures during economic crises, thus exacerbating the problem of youth unemployment. Using recent panel data of Swiss cantons and dynamic regression models, we examine the relationship between new apprenticeships and the business cycle. The empirical results suggest that economic shocks induce a rather small, pro-cyclical immediate response in the apprenticeship market. However, within a year after the shock, firms compensate for their immediate reaction, with the result that no permanent effect is observable.

Keywords: apprenticeship training, VET, education, business cycle, error correction model

JEL Classification: E24, E32, I21, J18, J44

Suggested Citation

Lüthi, Samuel and Wolter, Stefan C., Are Apprenticeships Business Cycle Proof?. IZA Discussion Paper No. 11374. Available at SSRN: https://ssrn.com/abstract=3137505

Samuel Lüthi (Contact Author)

University of Bern

Gesellschaftsstrasse 49
Bern, 3001
Switzerland

Stefan C. Wolter

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

CH - 5000 Aarau
Switzerland
+41 62 835 23 90 (Phone)
+41 62 835 23 99 (Fax)

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

University of Bern - Department of Economics ( email )

Gesellschaftstrasse 49
Bern, CH-3012
Switzerland
+41 31 631 40 95 (Phone)
+41 31 631 39 92 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

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

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