What do apprentices do after their training? : an analysis using the IAB Linked Employer-Employee dataset

Abstract

"The transition of western German apprentices at the end of their training is examined on the basis of a combined multiple choice and selection model. It models simultaneously a number of decisions made by the apprentices who have finished their training, as well as potentially existing internal and external wage offers depending on their characteristics. The analysis is carried out using the IAB Linked Employer-Employee dataset. The following results of the analysis are to be underlined: the level of the wage offer has a direct influence on an apprentice's decision to remain in the company where he/she has done his apprenticeship. In addition, a self-selection takes place of those apprentices who can obtain higher wages than expected either by staying in their company or by changing to another one. Thus, an efficient wage policy of the training company is possible in order to keep its apprentices after the training. Company-specific human capital plays a wage-increasing role both in the company's decision to make a wage offer as well as in the level of this wage offer. Wages below the market level which are based on the training company's insider-knowledge about the former apprentice's skills but which cannot be signalled to other companies (so-called wage compression) do not generally occur according to our results. Wage compression only happens in the case of apprentices who do not have an attractive offer immediately on completion of their training, and who therefore have to find a job on the open labour market. Thus, in Germany, training apprentices is obviously such a strong signal that it is not attractive for companies to use wage compression if they want to keep up with external wage offers for the good candidates." (Author's abstract, IAB-Doku) ((en))

Cite article

Schwerdt, W. & Bender, S. (2003): Was tun Lehrlinge nach ihrer Ausbildung? Eine Analyse mit dem Linked Employer-Employee-Datensatz des IAB. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 36, No. 1, p. 46-59.