The Timing and Flexibility of Apprenticeship Training

Countries have developed a variety of approaches for training workers to become effective in intermediate level occupations—those that require considerable skill but not a B.A. degree. Systems vary with respect to the level and duration of general education, the timing of occupation-specific education and training, and the split between classroomand work-based learning. Waiting too long to incorporate occupation-focused education and training runs the risk of high levels of disengaged students and forcing a highly academic approach on many students who would do better in a more concrete setting that emphasizes applications. This argument is especially strong to the extent that school requirements are poorly matched to the job market opportunities facing most young people.

On the other hand, beginning an occupation-focused program too early might trap youth in unrewarding fields and limit their adaptability and upward mobility. Work-based learning is appealing, but critics worry that the training will be too specific and firms will fail to offer sufficient positions. Still, several countries train skilled craftsmen through apprenticeships. However, for many other occupations, some systems rely entirely on school-based systems and some on work-based apprenticeship models that incorporate some classroom instruction.

Although discussions of skill preparation systems generally focus on the workvs. school-based distinction, the quality, depth, and portability of what students or apprentices learn are at least as important. The skills learned in school-based programs are not necessarily of greater general applicability than those learned in apprenticeship programs. It depends on the specifics of what is being taught and the likelihood that the worker will stay with the training occupation or an adjacent occupation. Depending on the program's content, workers may or may not be able to sustain the gains from training when moving to another firm with the same occupation or in other occupations.

The portability of the skills learned in occupation-specific programs is a common concern about apprenticeships or any occupation-specific training. Several questions are relevant. How likely is the worker to stay in the occupation and/or with the firm? Will the worker be able to sustain the gains from training when moving to another firm but staying in the same occupation? How transferable are the skills learned to other occupations? How do the earnings gains of workers trained in occupation-specific programs compare with those of workers receiving only general postsecondary education?

How skill portability varies with the mode of learning and the curricula is unclear, a priori. As Geel and Gelner (2009) point out, learning even a highly specific skill can yield benefits outside the narrow occupation.

For example, an adolescent who wants to become a clockmaker should not necessarily be considered poorly equipped for future labor market requirements, even though his industry is small and shrinking. Rather, he is well equipped because his skill combination is very similar to skill combinations of other occupations in a large and growing skill cluster, which includes, for example, medical technicians or tool makers. Despite a seemingly very narrow and inflexible skill combination in his original occupation, he is nonetheless very flexible and well prepared for future labor market changes due to the sustainability of his acquired skills and his current skill cluster.

To operationalize the concept of skill specificity, Geel and Gelner (2009) and Geel et al. (2011) begin with an insight borrowed from Lazear (2009) that all skills are general in some sense, and occupation-specific skills are composed of various mixes of skills. The authors compile the key skills and their importance for nearly 80 occupations. They then use cluster analysis to estimate how skills are grouped within narrow occupations. This approach recognizes that skills ostensibly developed for one occupation can be useful in other occupations. It identifies occupational clusters that possess similar skill combinations within a given cluster and different skill combinations between clusters. Next, indices for each narrow occupation measure the extent to which the occupation is relatively portable between occupations within the same cluster and/or relatively portable between the initial occupation and all other occupations. The authors use these indices to determine how portability affects mobility, the wage gains and losses in moving between occupations, and the likelihood that employers will invest in training.

The authors test their hypotheses on the basis of empirical analyses of German apprentices. One finding is that while only 42 % of apprentices stay in their initial occupation, nearly two-thirds remain with either the occupation they learned as an apprentice or another occupation in the cluster using a similar mix of skills. Second, those trained in occupations with more specific skill sets are most likely to remain in their initial occupation or move to occupations within the same cluster. Third, apprentices actually increase their wages when moving to another occupation within the same cluster but lose somewhat when moving to another cluster. Fourth, as Geel et al. (2011) show, employers are especially likely to invest in apprenticeships with the most specific skill sets.

Other strong evidence of the high returns and transferability of German apprenticeship training comes from Clark and Fahr (2001). They examine the returns to apprenticeship for those who remain in the original apprentice occupation as well as losses that do or would occur from transferring to another occupation. The overall rates of return to each year of apprenticeship range from 8 to 12 % for training in firms of 50 workers or more and from about 5.5 to 6.5 % for firms of two to 49 workers. Transferring to another occupation can offset these gains, but the reduction is zero for those who quit and only 1.7 % for those who are displaced from their job and shift to another occupation.

As found by Geel and Gellner (2009), the wage penalty varies with the distance from the original occupation. There is no penalty at all from displacement into a somewhat related occupation. Göggel and Zwick (2012) show the net gains or losses from switching employers and occupations differ by the original training occupation, with apprentices in industrial occupations actually experiencing wage advantages, while those in commerce, trading, and construction see modest losses. Finally, Clark and Fahr (2001) present workers' own views on their use of skills learned in apprenticeship training on their current jobs. Not surprisingly, 85 % of workers remaining within their training occupation use many or very many of the skills they learned through apprenticeship. This group constitutes 55 % of the sample. But, even among the remaining 45 %, about two of five workers reported using many or very many of the skills from their apprenticeship and one in five used some of the skills. Overall, only 18 % of all former apprentices stated they used few or no skills learned in their apprenticeships.

The findings show that the skills taught in German apprenticeship training are often general. Even when bundled for a specific occupation, the skills are portable across a cluster of occupations. Moreover, apprentices are quite likely to remain in occupations that use the skills they learned in their initial occupation. Apprenticeship skills do vary in terms of specificity and portability. But when the skills are less portable, firms are more likely to make the necessary investments and workers are less likely to change occupations significantly.

The general component of training is presumably stronger in school-based programs, because they are financed by government and/or individuals themselves. For this reason, some favor school-based systems, arguing that firm-based apprenticeship training limits mobility and adaptability (Hanushek et al. 2011). Yet, it is far from clear that these programs, especially the purely academic tracks in U.S. secondary schools and U.S. community colleges, offer more mobility. A high percentage of students drop out of both academic secondary and community college programs. Also, many of the community college programs are at least as specific as apprenticeship programs. Certificate programs within community colleges are almost entirely devoted to learning a narrow occupational skill, such as courses to become a phlebotomist, childcare assistant, or plastics-processing worker. Many U.S. school-based programs take place in for-profit colleges offering narrow programs, such as truck driving, medical assistant, and medical insurance billing and coding. Furthermore, skills often erode when they go unused. To the extent students learn general skills but rarely apply them and wind up forgetting them, their training is unlikely to offer upward mobility.

While community college and private for-profit students often take highly specific occupational courses, apprentices all take some general classroom courses. Thus, apprentice electricians learn the principles of science, especially those related to electricity. In most countries, collaboration takes place between public vocational schools and apprenticeship programs. In the U.S., apprentices often take their required “related instruction” in classes at community colleges or for-profit colleges (Lerman 2010). From this perspective, apprenticeship programs should be viewed as “dual” programs that combine workand school-based learning, albeit with an emphasis on work-based learning.

In the case of other OECD countries, the mix of schoolvs. employer-based programs used to prepare young people for careers varies widely (OECD 2009, 2010). Secondary school students in Belgium and Sweden participate at high rates in vocational education but have very low rates of participation in work-based programs. In contrast, most of the vocational education in Germany, Switzerland, and Denmark revolves around work-based learning, including apprenticeships.

Apprenticeship training is attractive in limiting the gaps between what is learned at school and how to apply these and other skills at the workplace. An extensive body of research documents the high economic returns to workers resulting from employer-led training (Bishop 1997). Transmitting skills to the workplace works well with supervisory support, interactive training, coaching, opportunities to perform what was learned in training, and keeping the training relevant to jobs (Pellegrino and Hilton 2012). These are common characteristics of apprenticeships. Employer-based training like apprenticeship often bears fruit in the form of higher levels of innovation (Bauernschuster et al. 2009), net gains to firms that train during and soon after the training, and externalities, such as benefits for other employers and the public when workers are well trained to avoid the consequences of natural or manmade disasters. Generally, apprenticeships and other forms of employerbased training are far less costly to the government. Moreover, the government generally gains by paying little for the training while reaping tax benefits from the increased earnings of workers.

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