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So similar and yet so different: A firm’s net costs and post-training benefits from apprenticeship training in Austria and Switzerland

Luca Moretti (Department of Economics, University of Zurich, Zurich, Switzerland)
Martin Mayerl (Österreichisches Institut für Berufsbildungsforschung, Vienna, Austria)
Samuel Muehlemann (Munich School of Management, LMU Munich, Munich, Germany) (Institute of Labor Economics (IZA), Bonn, Germany)
Peter Schlögl (Institut für Erziehungswissenschaft und Bildungsforschung, Alpen-Adria-Universitat Klagenfurt, Klagenfurt, Austria)
Stefan C. Wolter (Department of Economics, University of Bern, Bern, Switzerland) (Swiss Coordination Centre for Research in Education, Aarau, Switzerland) (Institute of Labor Economics (IZA), Bonn, Germany) (CESifo, Munich, Germany)

Evidence-based HRM

ISSN: 2049-3983

Publication date: 5 August 2019

Abstract

Purpose

The purpose of this paper is to compare a firm’s net cost and post-apprenticeship benefits of providing apprenticeship training in Austria and Switzerland: two countries with many similarities but some critical institutional differences.

Design/methodology/approach

The authors draw on detailed workplace data with information on the costs and benefits of apprenticeship training, as well as on hiring costs for skilled workers from the external labour market. The authors use nearest-neighbour matching models to compare Austrian firms with similar Swiss firms based on observable characteristics.

Findings

On average, a Swiss firm generates an annual net benefit of €3,400 from training an apprentice, whereas a firm in Austria incurs net costs of €4,200. The impetus for this difference is largely a higher relative apprentice pay in Austria. However, compared with Swiss firms, Austrian firms generate a higher post-training return by retaining a higher share of apprentices and savings on future hiring costs.

Practical implications

The authors demonstrate that apprenticeship systems can exist under different institutional environments. For countries currently in the process of establishing or expanding apprenticeship systems, the comparative analysis clearly shows that policymakers should consider more than just one country’s particular apprenticeship model.

Originality/value

The authors provide a first comparative analysis between two apprenticeship countries that empirically assesses a firm’s costs and benefits of training during an apprenticeship programme and also provides a monetary value of a particular type of post-training benefits that firms can generate by retaining former apprentices as skilled workers (i.e. savings in future hiring costs for skilled workers).

Keywords

Citation

Moretti, L., Mayerl, M., Muehlemann, S., Schlögl, P. and Wolter, S.C. (2019), "So similar and yet so different: A firm’s net costs and post-training benefits from apprenticeship training in Austria and Switzerland", Evidence-based HRM, Vol. 7 No. 2, pp. 229-246. https://doi.org/10.1108/EBHRM-08-2018-0047

Publisher

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Emerald Publishing Limited

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