[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_8598.html
   My bibliography  Save this paper

Unwilling to Train? Firm Responses to the Colombian Apprenticeship Regulation

Author

Listed:
  • Santiago Caicedo
  • Miguel Espinosa
  • Arthur Seibold
Abstract
We study firm responses to a large-scale change in apprenticeship regulation in Colombia. The reform requires firms to train, setting apprentice quotas that vary discontinuously in firm size. We document strong heterogeneity in responses across sectors, where firms in sectors with high skill requirements tend to avoid training apprentices, while firms in low-skill sectors seek apprentices. Guided by these reduced-form findings, we structurally estimate firms’ training costs. Especially in high-skill sectors, many firms face large training costs, limiting their willingness to train apprentices. Yet, we find substantial overall benefits of expanding apprenticeship training, in particular when the supply of trained workers increases in general equilibrium. Finally, we show that counterfactual policies that take into account heterogeneity across sectors can deliver similar benefits from training while inducing less distortions in the firm-size distribution and in the allocation of resources across sectors.

Suggested Citation

  • Santiago Caicedo & Miguel Espinosa & Arthur Seibold, 2020. "Unwilling to Train? Firm Responses to the Colombian Apprenticeship Regulation," CESifo Working Paper Series 8598, CESifo.
    • Handle: RePEc:ces:ceswps:_8598
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp8598.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Luis Garicano & Claire Lelarge & John Van Reenen, 2016. "Firm Size Distortions and the Productivity Distribution: Evidence from France," American Economic Review, American Economic Association, vol. 106(11), pages 3439-3479, November.
    2. Daron Acemoglu & Jörn-Steffen Pischke, 1998. "Why Do Firms Train? Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 79-119.
    3. David McKenzie, 2017. "How Effective Are Active Labor Market Policies in Developing Countries? A Critical Review of Recent Evidence," The World Bank Research Observer, World Bank, vol. 32(2), pages 127-154.
    4. Drew Fudenberg & Luis Rayo, 2019. "Training and Effort Dynamics in Apprenticeship," American Economic Review, American Economic Association, vol. 109(11), pages 3780-3812, November.
    5. Carlos Ospino, 2018. "The Effects of Being Subject to the Colombian Apprenticeship Contract on Manufacturing Firm Performance," CEDLAS, Working Papers 0230, CEDLAS, Universidad Nacional de La Plata.
    6. Mohrenweiser, Jens & Zwick, Thomas, 2009. "Why do firms train apprentices? The net cost puzzle reconsidered," Labour Economics, Elsevier, vol. 16(6), pages 631-637, December.
    7. Suresh de Mel & David McKenzie & Christopher Woodruff, 2019. "Labor Drops: Experimental Evidence on the Return to Additional Labor in Microenterprises," American Economic Journal: Applied Economics, American Economic Association, vol. 11(1), pages 202-235, January.
    8. Joel Slemrod, 2016. "Caveats to the Research Use of Tax-Return Administrative Data," National Tax Journal, National Tax Association;National Tax Journal, vol. 69(4), pages 1003-1020, December.
    9. Raj Chetty & John N. Friedman & Tore Olsen & Luigi Pistaferri, 2011. "Adjustment Costs, Firm Responses, and Micro vs. Macro Labor Supply Elasticities: Evidence from Danish Tax Records," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(2), pages 749-804.
    10. Nezih Guner & Gustavo Ventura & Xu Yi, 2008. "Macroeconomic Implications of Size-Dependent Policies," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 721-744, October.
    11. David Card & Jochen Kluve & Andrea Weber, 2018. "What Works? A Meta Analysis of Recent Active Labor Market Program Evaluations," Journal of the European Economic Association, European Economic Association, vol. 16(3), pages 894-931.
    12. Derek C. Jones & Panu Kalmi & Antti Kauhanen, 2012. "The effects of general and firm-specific training on wages and performance: evidence from banking," Oxford Economic Papers, Oxford University Press, vol. 64(1), pages 151-175, January.
    13. Kathrin Göggel & Thomas Zwick, 2012. "Heterogeneous Wage Effects of Apprenticeship Training," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(3), pages 756-779, September.
    14. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 91-134.
    15. Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 551-575.
    16. Crepon,Bruno Jacques Jean Philippe & Premand,Patrick, 2018. "Creating new positions ? direct and indirect effects of a subsidized apprenticeship program," Policy Research Working Paper Series 8561, The World Bank.
    17. Alan B. Krueger & Jorn-Steffen Pischke, 1995. "A Comparative Analysis of East and West German Labor Markets: Before and After Unification," NBER Chapters, in: Differences and Changes in Wage Structures, pages 405-446, National Bureau of Economic Research, Inc.
    18. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June.
    19. Adriana Kugler & Maurice Kugler & Juan E. Saavedra & Luis Omar Herrera-Prada, 2022. "Long-Term Educational Consequences of Vocational Training in Colombia: Impacts on Young Trainees and Their Relatives," Journal of Human Resources, University of Wisconsin Press, vol. 57(1), pages 178-216.
    20. repec:bla:germec:v:7:y:2006:i::p:249-264 is not listed on IDEAS
    21. Gary S. Becker, 1964. "Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, First Edition," NBER Books, National Bureau of Economic Research, Inc, number beck-5.
    22. Emmanuel Saez, 2010. "Do Taxpayers Bunch at Kink Points?," American Economic Journal: Economic Policy, American Economic Association, vol. 2(3), pages 180-212, August.
    23. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    24. Emanuela Galasso & Martin Ravallion & Agustin Salvia, 2004. "Assisting the Transition from Workfare to Work: A Randomized Experiment," ILR Review, Cornell University, ILR School, vol. 58(1), pages 128-142, October.
    25. Orazio Attanasio & Arlen Guarín & Carlos Medina & Costas Meghir, 2017. "Vocational Training for Disadvantaged Youth in Colombia: A Long-Term Follow-Up," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 131-143, April.
    26. Sarojini Hirshleifer & David McKenzie & Rita Almeida & Cristobal Ridao‐Cano, 2016. "The Impact of Vocational Training for the Unemployed: Experimental Evidence from Turkey," Economic Journal, Royal Economic Society, vol. 126(597), pages 2115-2146, November.
    27. Daniel A. Ackerberg & Kevin Caves & Garth Frazer, 2015. "Identification Properties of Recent Production Function Estimators," Econometrica, Econometric Society, vol. 83, pages 2411-2451, November.
    28. Acemoglu, Daron & Pischke, Jorn-Steffen, 1999. "Beyond Becker: Training in Imperfect Labour Markets," Economic Journal, Royal Economic Society, vol. 109(453), pages 112-142, February.
    29. Alejandro GAVIRIA URIBE & Jairo Augusto NUÑEZ MENDEZ, 2003. "Evaluating the impact of SENA on earnings and Employment," Archivos de Economía 2646, Departamento Nacional de Planeación.
    30. Wolter Stefan C. & Schweri Jürg & Mühlemann Samuel, 2006. "Why Some Firms Train Apprentices and Many Others Do Not," German Economic Review, De Gruyter, vol. 7(3), pages 249-264, August.
    31. Livia Alfonsi & Oriana Bandiera & Vittorio Bassi & Robin Burgess & Imran Rasul & Munshi Sulaiman & Anna Vitali, 2020. "Tackling Youth Unemployment: Evidence From a Labor Market Experiment in Uganda," Econometrica, Econometric Society, vol. 88(6), pages 2369-2414, November.
    32. Jozef Konings & Stijn Vanormelingen, 2015. "The Impact of Training on Productivity and Wages: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 485-497, May.
    33. Josef Fersterer & Jörn‐Steffen Pischke & Rudolf Winter‐Ebmer, 2008. "Returns to Apprenticeship Training in Austria: Evidence from Failed Firms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(4), pages 733-753, December.
    34. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    35. Wooldridge, Jeffrey M., 2009. "On estimating firm-level production functions using proxy variables to control for unobservables," Economics Letters, Elsevier, vol. 104(3), pages 112-114, September.
    36. Christian Dustmann & Uta Schönberg, 2012. "What Makes Firm-Based Vocational Training Schemes Successful? The Role of Commitment," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 36-61, April.
    37. Christian Dustmann & Uta Schönberg, 2009. "Training and Union Wages," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 363-376, May.
    38. Vincenzo Mollisi & Gabriele Rovigatti, 2017. "Theory and Practice of TFP Estimation: the Control Function Approach Using Stata," CEIS Research Paper 399, Tor Vergata University, CEIS, revised 14 Feb 2017.
    39. Matthew Groh & Nandini Krishnan & David McKenzie & Tara Vishwanath, 2016. "Do Wage Subsidies Provide a Stepping-Stone to Employment for Recent College Graduates? Evidence from a Randomized Experiment in Jordan," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 488-502, July.
    40. David Card & Pablo Ibarrarán & Ferdinando Regalia & David Rosas-Shady & Yuri Soares, 2011. "The Labor Market Impacts of Youth Training in the Dominican Republic," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 267-300.
    41. Alessandra Del Boca & Paola Rota, 1998. "How Much Does Hiring and Firing Cost? Survey Evidence from a Sample of Italian Firms," LABOUR, CEIS, vol. 12(3), pages 427-449, September.
    42. Bernal Raquel, 2009. "The Informal Labor Market in Colombia: identification and characterization," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, September.
    43. Luis Garicano & Esteban Rossi-Hansberg, 2004. "Inequality and the Organization of Knowledge," American Economic Review, American Economic Association, vol. 94(2), pages 197-202, May.
    44. Orazio Attanasio & Adriana Kugler & Costas Meghir, 2011. "Subsidizing Vocational Training for Disadvantaged Youth in Colombia: Evidence from a Randomized Trial," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 188-220, July.
    45. Sarojini Hirshleifer & David McKenzie & Rita Almeida & Cristobal Ridao‐Cano, 2016. "The Impact of Vocational Training for the Unemployed: Experimental Evidence from Turkey," Economic Journal, Royal Economic Society, vol. 126(597), pages 2115-2146, November.
    46. Luis Garicano & Esteban Rossi-Hansberg, 2006. "Organization and Inequality in a Knowledge Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1383-1435.
    47. Małgorzata Kuczera, 2017. "Striking the right balance: Costs and benefits of apprenticeship," OECD Education Working Papers 153, OECD Publishing.
    48. Ms. Era Dabla-Norris & Laura Jaramillo & Frederico Lima & Alexandre Sollaci, 2018. "Size Dependent Policies, Informality and Misallocation," IMF Working Papers 2018/179, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Caliendo, Marco & Cobb-Clark, Deborah A. & Pfeifer, Harald & Uhlendorff, Arne & Wehner, Caroline, 2024. "Managers’ risk preferences and firm training investments," European Economic Review, Elsevier, vol. 161(C).
    2. Eric Schuss, 2023. "Beyond windfall gains: The redistribution of apprenticeship costs and vocational education of care workers," Economica, London School of Economics and Political Science, vol. 90(359), pages 978-1002, July.
    3. Gustavo de Souza, 2020. "Employment and Welfare Effects of the Quota for Disabled Workers in Brazil," Working Paper Series WP 2023-11, Federal Reserve Bank of Chicago.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Livia Alfonsi & Oriana Bandiera & Vittorio Bassi & Robin Burgess & Imran Rasul & Munshi Sulaiman & Anna Vitali, 2020. "Tackling Youth Unemployment: Evidence From a Labor Market Experiment in Uganda," Econometrica, Econometric Society, vol. 88(6), pages 2369-2414, November.
    2. Pardesi, Mantej, 2024. "Productivity convergence and firm’s training strategy," ROA Research Memorandum 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    3. Santiago Caicedo & Arthur Seibold & Miguel Espinosa, 2019. "The Effects of Mandating Training in Firms: Theory and Evidence from the Colombian Apprenticeship Program," 2019 Meeting Papers 888, Society for Economic Dynamics.
    4. Pardesi, Mantej, 2024. "Productivity Convergence and Firm’s Training Strategy," Research Memorandum 003, Maastricht University, Graduate School of Business and Economics (GSBE).
    5. Crepon,Bruno Jacques Jean Philippe & Premand,Patrick, 2018. "Creating new positions ? direct and indirect effects of a subsidized apprenticeship program," Policy Research Working Paper Series 8561, The World Bank.
    6. Jens Mohrenweiser & Thomas Zwick & Uschi Backes‐Gellner, 2019. "Poaching and Firm‐Sponsored Training," British Journal of Industrial Relations, London School of Economics, vol. 57(1), pages 143-181, March.
    7. Luis Garicano & Claire Lelarge & John Van Reenen, 2016. "Firm Size Distortions and the Productivity Distribution: Evidence from France," American Economic Review, American Economic Association, vol. 106(11), pages 3439-3479, November.
    8. David McKenzie, 2017. "How Effective Are Active Labor Market Policies in Developing Countries? A Critical Review of Recent Evidence," The World Bank Research Observer, World Bank, vol. 32(2), pages 127-154.
    9. Manuel Aepli & Samuel Muehlemann & Harald Pfeifer & Jürg Schweri & Felix Wenzelmann & Stefan C. Wolter, 2024. "The Impact of Hiring Costs for Skilled Workers on Apprenticeship Training: A Comparative Study," CESifo Working Paper Series 11066, CESifo.
    10. Camargo Juliana & Lima Lycia & Riva Flavio & Souza André Portela, 2021. "Technical Education, Non-cognitive Skills and Labor Market Outcomes: Experimental Evidence from Brazil," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-34, January.
    11. Das, Narayan, 2021. "Training the disadvantaged youth and labor market outcomes: Evidence from Bangladesh," Journal of Development Economics, Elsevier, vol. 149(C).
    12. Chakravarty, Shubha & Lundberg, Mattias & Nikolov, Plamen & Zenker, Juliane, 2019. "Vocational training programs and youth labor market outcomes: Evidence from Nepal," Journal of Development Economics, Elsevier, vol. 136(C), pages 71-110.
    13. Gnocato, Nicolò & Modena, Francesca & Tomasi, Chiara, 2020. "Labor market reforms and allocative efficiency in Italy," Labour Economics, Elsevier, vol. 67(C).
    14. Chowdhury, Shyamal & Hasan, Syed & Sharma, Uttam, 2024. "The Role of Trainee Selection in the Effectiveness of Vocational Training: Evidence from a Randomized Controlled Trial in Nepal," IZA Discussion Papers 16705, Institute of Labor Economics (IZA).
    15. Giorgio d'Agostino & Michele Raitano & Margherita Scarlato, 2022. "Job mobility and heterogeneous returns to apprenticeship training in Italy," British Journal of Industrial Relations, London School of Economics, vol. 60(2), pages 391-423, June.
    16. Adam Osman & Jamin D. Speer, 2024. "Stigma and take‐up of labour market assistance: Evidence from two field experiments," Economica, London School of Economics and Political Science, vol. 91(361), pages 123-141, January.
    17. Marco Bee & Julien Hambuckers, 2020. "Modeling multivariate operational losses via copula-based distributions with g-and-h marginals," DEM Working Papers 2020/3, Department of Economics and Management.
    18. Huzeyfe Torun & Semih Tumen, 2019. "Do vocational high school graduates have better employment outcomes than general high school graduates?," International Journal of Manpower, Emerald Group Publishing Limited, vol. 40(8), pages 1364-1388, August.
    19. Dan A. Black & Lars Skipper & Jeffrey A. Smith & Jeffrey Andrew Smith, 2023. "Firm Training," CESifo Working Paper Series 10268, CESifo.
    20. Werner Eichhorst & Núria Rodríguez-Planas & Ricarda Schmidl & Klaus F. Zimmermann, 2015. "A Road Map to Vocational Education and Training in Industrialized Countries," ILR Review, Cornell University, ILR School, vol. 68(2), pages 314-337, March.

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_8598. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.