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Are Apprenticeships Business Cycle Proof?
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Are Apprenticeships Business Cycle Proof?

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  • Lüthi, Samuel

    (Swiss Co-ordination Center for Research in Education)

  • Wolter, Stefan C.

    (University of Bern)

Abstract

Although there is evidence that apprenticeship training can ease the transition of youth into the labour market and thereby reduce youth unemployment, many policy makers fear that firms will cut their apprenticeship expenditures during economic crises, thus exacerbating the problem of youth unemployment. Using recent panel data of Swiss cantons and dynamic regression models, we examine the relationship between new apprenticeships and the business cycle. The empirical results suggest that economic shocks induce a rather small, pro-cyclical immediate response in the apprenticeship market. However, within a year after the shock, firms compensate for their immediate reaction, with the result that no permanent effect is observable.

Suggested Citation

  • Lüthi, Samuel & Wolter, Stefan C., 2018. "Are Apprenticeships Business Cycle Proof?," IZA Discussion Papers 11374, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11374
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    Cited by:

    1. Thomas Bolli & Guillaume Morlet, 2023. "Does human capital theory govern the relationship between training provision and the business cycle? Evidence from Switzerland," French Stata Users' Group Meetings 2023 26, Stata Users Group.
    2. 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).
    3. Caroline Neuber-Pohl & Damiano Pregaldini & Uschi Backes-Gellner & Sandra Dummert & Harald Pfeifer, 2023. "How negative labor supply shocks affect training in firms: Lessons from opening the Swiss-German border," Economics of Education Working Paper Series 0203, University of Zurich, Department of Business Administration (IBW), revised Nov 2023.
    4. Pardesi, Mantej, 2024. "Productivity Convergence and Firm’s Training Strategy," Research Memorandum 003, Maastricht University, Graduate School of Business and Economics (GSBE).
    5. Lisa Simon, 2018. "Shocking Choice: Trade Shocks, Local Labor Markets and Vocational Occupation Choices," ifo Working Paper Series 281, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    6. Thomsen, Stephan L. & Trunzer, Johannes, 2020. "Did the Bologna Process Challenge the German Apprenticeship System? Evidence from a Natural Experiment," GLO Discussion Paper Series 690, Global Labor Organization (GLO).
    7. Samuel Muehlemann & Harald Pfeifer & Bernhard Wittek, 2020. "The effect of business cycle expectations on the German apprenticeship market: Estimating the impact of Covid-19," Economics of Education Working Paper Series 0171, University of Zurich, Department of Business Administration (IBW).
    8. Daniel Goller & Stefan C. Wolter, 2021. "“Too shocked to search” The COVID-19 shutdowns’ impact on the search for apprenticeships," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 157(1), pages 1-15, December.
    9. Lisa Simon, 2019. "Microeconometric Analyses on Determinants of Individual Labour Market Outcomes," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 83.
    10. Bertoni Marco & Brunello Giorgio, 2022. "Training during recessions: recent European evidence," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 12(1), pages 1-17, January.
    11. Aepli, Manuel & Kuhn, Andreas, 2021. "Open labor markets and Firms’ substitution between training apprentices and hiring workers," Labour Economics, Elsevier, vol. 70(C).

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    More about this item

    Keywords

    education; VET; apprenticeship training; business cycle; error correction model;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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