Apprenticeship Training in Germany - Investment or Productivity Driven?

28 Pages Posted: 13 May 2007 Last revised: 26 Aug 2008

See all articles by Thomas Zwick

Thomas Zwick

University of Würzburg - Business Administration & Economics; Centre for European Economic Research (ZEW); Maastricht University - Research Centre for Education and the Labour Market (ROA)

Date Written: 2007

Abstract

The German dual apprenticeship system came under pressure in recent years because enterprises were not willing to offer a sufficient number of apprenticeship positions. A frequently made argument is that the gap could be closed if more firms would be willing to incur net costs during the training period. This paper investigates for the first time whether German enterprises on average indeed incur net costs during the apprenticeship period, i.e. if the impact of an increase in the share of apprentices on contemporary profits is negative. The paper uses the representative linked employer-employee panel data of the IAB (LIAB) and takes into account possible endogeneity of training intensity and unobserved heterogeneity in the profit estimation by employing panel system GMM methods. An increase in the share of apprentices has no effect on profits. This can be interpreted as a first indication that most establishments in Germany do not invest more in apprentices than their productivity effects during the apprenticeship period.

Keywords: Apprenticeship Training, Returns, Germany

JEL Classification: I21, J31

Suggested Citation

Zwick, Thomas, Apprenticeship Training in Germany - Investment or Productivity Driven? (2007). ZEW - Centre for European Economic Research Discussion Paper No. 07-023. Available at SSRN: https://ssrn.com/abstract=985868 or http://dx.doi.org/10.2139/ssrn.985868

Thomas Zwick (Contact Author)

University of Würzburg - Business Administration & Economics ( email )

Sanderring 2
Wuerzburg, D-97070
Germany

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

Maastricht University - Research Centre for Education and the Labour Market (ROA) ( email )

P.O. Box 616
Maastricht, MD6200
Netherlands

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