Do employment subsidies reduce early apprenticeship dropout?

Abstract

We evaluate the effect of the Apprenticeship Bonus, an employment subsidy programme, on early apprenticeship dropout. Eligibility for the programme is restricted to school leavers who have actively looked for an apprenticeship to start immediately after leaving school, but were unsuccessful in finding one. Our analysis is based on rich survey data that were collected specifically for this study. Using this data, we describe the characteristics of school leavers who looked unsuccessfully for an apprenticeship directly after leaving school and analyse the effect of the subsidy on the probability of apprenticeship dropout. Even though the subsidy provides strong incentives to discourage dropout, we do not find significant effects of the programme. Our findings suggest that financial incentives are not effective in increasing the probability of people finishing vocational in-firm training successfully. © 2014, Centre for European Economic Research (ZEW).

Keywords

Author Keywords

Apprenticeship Dropout Vocational training subsidised employment

Index Keywords

Author Affiliations

Zentrum für Europäische Wirtschaftsforschung GmbH, Mannheim, Baden-Wurttemberg, Germany

Funding & Acknowledgements

Youth Foundation, Youth Foundation

This paper is based on the evaluation study \u2018Effects of the Apprenticeship Bonus on the apprenticeship market and on public finance\u2019, which was conducted on behalf of the German Federal Parliament. We gratefully acknowledge the provision of data by the German Federal Employment Agency and the Institute for Employment Research (IAB). We have benefited from discussions in the ZEW seminar, at the ESPE Annual Conference, and IZA workshop on Youth Unemployment and Labour Market Integration. We are also grateful to Bernd Fitzenberger, Thomas Zwick and three anonymous referees for helpful comments, and to Annette Hillerich and Markus Zimmermann for excellent research assistance.

W.E. Upjohn Institute for Employment Research, W.E. Upjohn Institute for Employment Research

This paper is based on the evaluation study \u2018Effects of the Apprenticeship Bonus on the apprenticeship market and on public finance\u2019, which was conducted on behalf of the German Federal Parliament. We gratefully acknowledge the provision of data by the German Federal Employment Agency and the Institute for Employment Research (IAB). We have benefited from discussions in the ZEW seminar, at the ESPE Annual Conference, and IZA workshop on Youth Unemployment and Labour Market Integration. We are also grateful to Bernd Fitzenberger, Thomas Zwick and three anonymous referees for helpful comments, and to Annette Hillerich and Markus Zimmermann for excellent research assistance.

Federal Security Agency, Federal Security Agency

This paper is based on the evaluation study \u2018Effects of the Apprenticeship Bonus on the apprenticeship market and on public finance\u2019, which was conducted on behalf of the German Federal Parliament. We gratefully acknowledge the provision of data by the German Federal Employment Agency and the Institute for Employment Research (IAB). We have benefited from discussions in the ZEW seminar, at the ESPE Annual Conference, and IZA workshop on Youth Unemployment and Labour Market Integration. We are also grateful to Bernd Fitzenberger, Thomas Zwick and three anonymous referees for helpful comments, and to Annette Hillerich and Markus Zimmermann for excellent research assistance.

Parliament of Australia, Parliament of Australia

This paper is based on the evaluation study \u2018Effects of the Apprenticeship Bonus on the apprenticeship market and on public finance\u2019, which was conducted on behalf of the German Federal Parliament. We gratefully acknowledge the provision of data by the German Federal Employment Agency and the Institute for Employment Research (IAB). We have benefited from discussions in the ZEW seminar, at the ESPE Annual Conference, and IZA workshop on Youth Unemployment and Labour Market Integration. We are also grateful to Bernd Fitzenberger, Thomas Zwick and three anonymous referees for helpful comments, and to Annette Hillerich and Markus Zimmermann for excellent research assistance.

UK Research and Innovation, UKRI

Grant: 103443

This paper is based on the evaluation study \u2018Effects of the Apprenticeship Bonus on the apprenticeship market and on public finance\u2019, which was conducted on behalf of the German Federal Parliament. We gratefully acknowledge the provision of data by the German Federal Employment Agency and the Institute for Employment Research (IAB). We have benefited from discussions in the ZEW seminar, at the ESPE Annual Conference, and IZA workshop on Youth Unemployment and Labour Market Integration. We are also grateful to Bernd Fitzenberger, Thomas Zwick and three anonymous referees for helpful comments, and to Annette Hillerich and Markus Zimmermann for excellent research assistance.

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Do employment subsidies reduce early apprenticeship dropout?

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