Employer learning during apprenticeship

ABSTRACT

In this letter, we study employer learning about worker ability during apprenticeship. We exploit an exogenous shock that increased the number of apprenticeship contracts in Italy, to analyse what type of workers were hired and which ones were trained more during the contract. We find that firms select workers according to their ability not upon recruiting them, but during the apprenticeships and the higher the revealed ability of the workers, the more training they receive.

KEYWORDS:

• Apprenticeship
• training
• ability
• employer learning

JEL CLASSIFICATION:

• J38
• J24

Disclosure statement

No potential conflict of interest was reported by the authors.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

¹ Type 1 and Type 3 are the new apprenticeship schemes introduced in 2003 that are an integral part of the Vocational and Education Systems. Still, in 2017 about 95% of apprenticeship contracts were Type 2 contract.

² The reform raised the maximum age limit on an apprenticeship contract from 25 to 29.

³ Before the reform, mandatory training occurred mainly in class training courses organized by local governments.

⁴ For a detailed description of the years, sectors and regions in which the reform was implemented see Albanese et al, 2019.

⁵ Other studies used the same reform as an exogenous variation to which the labour market was exposed to investigate apprenticeship from an individual perspective. See Albanese et al, (2019) for a review.

⁶ Older youths were excluded because before 2003 it was not possible for them to have an apprenticeship.

⁷ Training can be classroom courses, distance learning, seminars, workshops or coaching.

⁸ This can be a good measure of individual ability, even though locally assigned, and usually correlates highly with the national standardized test.

⁹ The eigenvalue is equal to 1.16.