Abstract
German establishments heavily rely on the apprenticeship system for skill supply. With one in four apprenticeship contracts ending before successful completion, it is in the interest of establishments and policy-makers to determine factors, which reduce non-completion. This paper investigates the role of apprenticeship wages and income prospects after completion for apprenticeship non-completion in Germany. For this purpose, this study identifies incidences of apprenticeship non-completion in a large sample of administrative data on employment biographies and estimates a piecewise exponential model of the non-completion hazard with shared frailties by occupations. The results suggest a robust and significant association with both apprenticeship wages and skilled worker wages. All else at means, apprenticeships which are paid 5% more than the mean apprenticeship wage, on average have a 0.8 percentage points higher estimated survival rate. In turn, an apprenticeship expected to lead to a skilled job that is paid 5% above average, has an estimated survival rate, which is 3.1 percentage points higher on average. These findings highlight the importance of income prospects for apprenticeship non-completion.
Highlights
Not every apprenticeship[1] in Germany ends successfully; i.e., with obtaining of the nationally standardized diploma
Wages and non‐completion The results indicate for both W /W (l) and ln W (m) that hazard ratios are significantly below one at a 5% significance level
This paper closes a research gap by analyzing how non-completion is associated with apprenticeship wages and wage prospects after completion
Summary
Not every apprenticeship[1] in Germany ends successfully; i.e., with obtaining of the nationally standardized diploma. (2020b) calculates that currently one in four apprenticeship contracts is terminated before its end date. The number of early contract terminations[2] has increased almost continuously over the past decade. Apprenticeship non-completion can be a good consequence of the occupational orientation of young apprentices (Rohrbach-Schmidt and Uhly 2015), the rise in early contract termination rates raises concerns, because apprenticeship non-completion. Neuber‐Pohl Empirical Res Voc Ed Train (2021) 13:12 may be costly for training firms and apprentices alike. In light of increasing shortages of skilled labor and apprentices, reducing apprenticeship non-completion has been a common goal for policy-makers, employers, and unions (cf Rohrbach-Schmidt and Uhly 2015).[3]
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