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Supply shocks in the market for apprenticeship training

Author

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  • Muehlemann, Samuel
  • Pfann, Gerard

    (RS: GSBE Theme Learning and Work, RS: GSBE Theme Data-Driven Decision-Making, RS: GSBE Theme Creativity, Innovation & Entrepreneurship , Organisation,Strategy & Entrepreneurship)

  • Pfeifer, Harald
  • Dietrich, Hans
Abstract
We present a model with heterogeneous inputs and constant elasticity of substitution to examine the possible effects of a supply shock in the market for apprenticeship training. The model’s predictions are tested using data from a German high school reform that led to a one-time increase in the supply of highly educated apprentices. A difference-in-differences estimation strategy exploits regional variation in the timing of implementation, and an instrumental variable approach identifies the supply shock effects. We find that apprenticeship contracts among individuals with a high school degree increased by 7.8%, while apprentice wages were unaffected by the supply shock. Moreover, we find no evidence of substitution effects, as the number of training contracts among individuals with a lower-level school degree remained unchanged. Our model predicts that such effects may occur when wages are sticky for apprentices with a high level of education relative to their productivity, which signals inefficiencies in the market for apprenticeship training.

Suggested Citation

  • Muehlemann, Samuel & Pfann, Gerard & Pfeifer, Harald & Dietrich, Hans, 2020. "Supply shocks in the market for apprenticeship training," ROA Research Memorandum 013, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    • Handle: RePEc:unm:umaror:2020013
    DOI: 10.26481/umaror.2020013
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    References listed on IDEAS

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    Cited by:

    1. Dorner, Matthias & Görlitz, Katja, 2020. "Training, wages and a missing school graduation cohort," Ruhr Economic Papers 858, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Carolin Linckh & Caroline Neuber-Pohl & Harald Pfeifer, 2023. "The employment effects of raising negotiated minimum wages for apprentices," Economics of Education Working Paper Series 0202, University of Zurich, Department of Business Administration (IBW).
    3. 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).
    4. Pardesi, Mantej, 2024. "Productivity Convergence and Firm’s Training Strategy," Research Memorandum 003, Maastricht University, Graduate School of Business and Economics (GSBE).
    5. Samuel Muehlemann & Gerard Pfann & Harald Pfeifer, 2024. "Apprenticeship Input Demand Cyclicality of R&D and non-R&D Firms," Economics of Education Working Paper Series 0223, University of Zurich, Department of Business Administration (IBW).

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    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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