Dual TVET education in Chile: why do companies train students?

ABSTRACT

This paper analyses the costs and benefits of dual training programmes for companies in Chile. The model has three main components: (1) the costs that arise during the programme (training, student labour, administrative, and educational supplies), (2) the benefits that companies receive during the programme in terms of student’s productivity, and (3) the potential benefits that companies can obtain in hiring and adjustment savings if students are hired after the programme. Using an online survey, we estimate that Chilean companies that participate incur net costs of US$3,200 per student per year in training; however, most companies declared to be satisfied with dual training. We simulate two scenarios under which dual training is cost effective. Public policies to promote early adjustment such that students arrive at companies better prepared and can allocate more time to productive tasks should be considered to decrease the net cost of training.

KEYWORDS:

• Vocational education & training
• workplace learning
• vet and the labour market

Acknowledgments

This research was funded by the Ministry of Education, Nestlé and Fundación Chile Dual. We acknowledge support from ANID/FONDAP/15130009 and ANID – Millennium Science Initiative Program – Code NCS17_015. We also would like to thank Kevin Jaña for outstanding research assistance and Juan Esteban Dulcic for useful comments.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Employers also detect other hard-to-valuate benefits, such as positive impacts on innovation (Bauernschuster, Falck, and Heblich 2009), increased productivity among other workers and improvements in the labour atmosphere (Lerman, Eyster, and Chambers 2009).

2. Switzerland’s better results are attributed to the facts that students spend more days at the company on average and spend more time engaged in productive work (Wolter and Ryan 2011).

3. In total, 313 companies answered at least one survey question, but most companies did not complete a sufficient number of responses to be considered in the analyses.

4. The following four fields of secondary vocational education were used: commercial, technical, industrial and agricultural. The maritime field was not considered because there were no companies belonging to that sector.

5. Based on an average of 20.83 business days per month, the exact number of days per month ranges from 8.33 to 10.42.

6. It is necessary to consider that in a significant number of companies, payments and allowances are equal to zero, which decreases the average student labour costs presented here.

Additional information

Funding

This work was supported by Nestlé; Fundación Chile Dual; Chilean Ministry of Education; ANID – Millennium Science Initiative Program [NCS17_015]; ANID/FONDAP [15130009];