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Returns to apprenticeship training in Austria: evidence from failed firms

Fersterer, Josef, Pischke, Jörn-Steffen and Winter-Ebmer, Rudolf (2008) Returns to apprenticeship training in Austria: evidence from failed firms. Scandinavian Journal of Economics, 110 (4). pp. 733-753. ISSN 1467-9442

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Abstract

Little is known about the payoffs to apprenticeship training in the German speaking countries for the participants. OLS estimates suggest that the returns are similar to those of other types of schooling. However, there is a lot of heterogeneity in the quality of apprenticeships offered, and institutional descriptions suggest that there might be an important element of selection in who obtains an apprenticeship, and what type. In order to overcome the resulting ability bias we estimate returns to apprenticeship training for apprentices in small firms in Austria, which cease to operate. When a firm fails, current apprentices cannot complete their training in this firm. Because apprentices will be at different stages in their apprenticeship at that time, the failure of a firm will manipulate the length of the apprenticeship period completed for some apprentices. The time to the firm failure therefore serves as an instrument for the length of the apprenticeship completed both at the original firm and at other firms. We find instrumental variables returns which are similar or larger than the OLS returns in our sample, indicating relatively little selection.

Item Type: Article
Official URL: http://www.wiley.com/bw/journal.asp?ref=0347-0520
Additional Information: © 2008 Föreningen för utgivande av SJE
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
L Education > L Education (General)
Journal of Economic Literature Classification System: J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
Sets: Research centres and groups > Centre for the Economics of Education (CEE)
Collections > Economists Online
Departments > Economics
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 05 May 2009 11:10
URL: http://eprints.lse.ac.uk/23550/

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