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Apprenticeships and training

Educational institutions and firms are increasingly realizing the benefits of providing training programs for students and workers as a means of enhancing the skills of current and future workers. Vocational and on-the-job training can encourage existing employees to be more productive and retire later and help young people onto the job ladder.

Apprenticeships are another example of a system for training a new generation of practitioners of a trade or profession by combining on-the-job training and study; systems vary widely across countries. Countries, like Belgium, France, and the US, have seen little penetration into occupations outside the construction and manufacturing industries, while take-up in countries like Austria, Denmark, Germany, and Switzerland is high and increasing in popularity in Australia and England.

So it seems that training is generally a profitable investment for firms as well as workers.

  • The labor market in Germany, 2000–2018 Updated

    The transformation of a notoriously rigid labor market into a role model of its own style is essentially complete

    Hilmar SchneiderUlf Rinne, December 2019
    The EU's largest economy, Germany, has managed to find an effective and unique combination of flexibility and rigidity in its labor market. Institutions that typically characterize rigid labor markets are effectively balanced by flexibility instruments. Important developments since 2000 include steadily decreasing unemployment rates (since 2005), increasing participation rates, and (since 2011) moderately increasing labor compensation. The German labor market was remarkably robust to the impacts of the Great Recession, thus providing a useful case study for other developed countries.
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  • Do firms benefit from apprenticeship investments? Updated

    Why spending on occupational skills can yield economic returns to employers

    Robert Lerman, October 2019
    Economists have long believed that firms will not pay to develop occupational skills that workers could use in other, often competing, firms. Researchers now recognize that firms that invest in apprenticeship training generally reap good returns. Evidence indicates that financial returns to firms vary. Some recoup their investment within the apprenticeship period, while others see their investment pay off only after accounting for reduced turnover, recruitment, and initial training costs. Generally, the first year of apprenticeships involves significant costs, but subsequently, the apprentice's contributions exceed his/her wages and supervisory costs. Most participating firms view apprenticeships as offering certainty that all workers have the same high level of expertise and ensuring an adequate supply of well-trained workers to cover sudden increases in demand and to fill leadership positions.
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  • The labor market in Austria, 2000–2016

    Fifteen years ago Austria was the “better Germany,” but it has failed to keep up over time

    René Böheim, December 2017
    Austria is an interesting economy due to its strong industrial relations with institutionalized collective bargaining over wage negotiations and working conditions. Currently, Austria’s GDP per capita is high, but unemployment, although comparably low on an international scale, is not declining in the aftermath of the financial crisis. The labor market is also characterized by an increasing share of mostly low-skilled foreign workers. High marginal labor taxes discourage low-skilled workers from leaving social assistance.
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  • Skills or jobs: Which comes first?

    Jobs require skills, but they also build skills and create a demand for them

    Jesko Hentschel, February 2017
    Skills are widely regarded as being necessary for boosting productivity, stimulating innovation, and creating new jobs, while skill mismatches are often cited as being responsible for a lack of dynamism in the labor market. However, heavy investments in technical and vocational training programs are seldom a “silver bullet.” Recent evidence on skill building not only points to the core importance of foundational skills (both cognitive and social) for success in the labor market, but also emphasizes how jobs themselves can lead to learning and shape social competencies that, in turn, ignite innovation and create more jobs.
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  • The dynamics of training programs for the unemployed

    Job-search training and occupational skills training are both effective

    Aderonke Osikominu, July 2016
    Time plays an important role in both the design and interpretation of evaluation studies of training programs. While the start and duration of a training program are closely linked to the evolution of job opportunities, the impact of training programs in the short and longer term changes over time. Neglecting these “dynamics” could lead to an unduly negative assessment of the effects of certain training schemes. Therefore, a better understanding of the dynamic relationship between different types of training and their respective labor market outcomes is essential for a better design and interpretation of evaluation studies.
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  • Are apprenticeships beneficial in sub-Saharan Africa?

    As they do not lead to high-productivity jobs, apprenticeships in sub-Saharan Africa fail to generate high incomes

    Francis Teal, June 2016
    Apprenticeships are the most common form of non-academic training in sub-Saharan Africa. Most apprenticeships are provided by the private sector, for a fee, and lead to self-employment rather than to wage jobs. Where the effects have been measured, they show that earnings are not higher, on average, for people who did an apprenticeship than for those who did not. This presents a conundrum. Why would people pay for apprenticeship training that does not benefit them? Research reveals that apprenticeships do benefit some people more than others. Especially striking is that the returns to apprenticeships can fall with the level of education.
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