Please find a new research report on “Apprenticeship training in England – a cost-effective model for firms?” by Prof. Dr. Stefan C. Wolter and Eva Joho of the ILO. The authors have used evidence from Germany, Switzerland and Austria to simulate the costs and benefits of an apprenticeship policy applied in an English context. In summary, this study analyses the question of whether an average English firm could expect a net benefit when training apprentices in a similar manner to Swiss firms but does not evaluate either current English apprenticeships or current policy measures.
The five main conclusions that the study draw are the following:
1.Net benefits for firms when training younger apprentices- The chances for firms of breaking even at the end of the training period of an apprenticeship are highest for three-year programs assuming that the apprentices are younger than 19 years, because minimum wages increase substantially afterwards in England.
2.Individual rates of return higher when younger.
3. Big firms could expect higher net benefits, whereas micro-companies may sometimes even face net costs in scenarios where the average firm can expect net benefits.
4.Three occupations in the retail sector and the catering & hospitality sector (cooks, retail cashiers, and waiters) produce simulation outcomes that show difficulties for firms to break even. In the three cases, the skill premium observable today in the UK labour market is too low to guarantee favourable outcomes for firms and apprentices.
5.Increases in the quality of training crucial that would improve the labour market outcomes of apprentices could be a necessity to secure talented applicants for the programs and thereby also reduce dropout rates.
