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Purpose The purpose of this paper is to compare a firm’s net cost and post-apprenticeship benefits of providing apprenticeship training in Austria and Switzerland: two countries with many similarities but some critical institutional differences. Design/methodology/approach The authors draw on detailed workplace data with information on the costs and benefits of apprenticeship training, as well as on hiring costs for skilled workers from the external labour market. The authors use nearest-neighbour matching models to compare Austrian firms with similar Swiss firms based on observable characteristics. Findings On average, a Swiss firm generates an annual net benefit of €3,400 from training an apprentice, whereas a firm in Austria incurs net costs of €4,200. The impetus for this difference is largely a higher relative apprentice pay in Austria. However, compared with Swiss firms, Austrian firms generate a higher post-training return by retaining a higher share of apprentices and savings on future hiring costs. Practical implications The authors demonstrate that apprenticeship systems can exist under different institutional environments. For countries currently in the process of establishing or expanding apprenticeship systems, the comparative analysis clearly shows that policymakers should consider more than just one country’s particular apprenticeship model. Originality/value The authors provide a first comparative analysis between two apprenticeship countries that empirically assesses a firm’s costs and benefits of training during an apprenticeship programme and also provides a monetary value of a particular type of post-training benefits that firms can generate by retaining former apprentices as skilled workers (i.e. savings in future hiring costs for skilled workers).

Purpose The purpose of this paper is to simulate the potential costs and benefits for Spanish firms providing dual apprenticeship training. Design/methodology/approach The paper conducts simulations of ten training occupations in six different industries in Spain. For these simulations, the authors combined Spanish wage data and the existing training curriculum regarding instruction times in vocational school in Spain with data from Swiss firms offering training in similar occupations. These data contain information regarding the amount of workplace training, relative apprentice productivity, and the relative importance of non-wage training costs (such as training equipment). Findings The authors found that training occupation, training scenario, and firm size are important determinants of the authors’ simulations for the expected net costs of apprenticeship training in Spanish firms. Consequently, the break-even level of apprentices’ wages differs significantly by training occupation and training scenario, suggesting that one prescribed apprentice wage for all sectors and occupations would be detrimental to the willingness of many firms to provide training places. Practical implications Dual apprenticeship training may improve the labor market transition for Spanish youth. The paper provides guidelines for regulatory frameworks that allow firms to provide apprenticeship training without having to bear net training costs – an important condition given that apprentices are free to leave the training firm upon graduation. Social implications The authors’ simulations show that Spanish firms would be able to provide high-quality apprenticeship training programs that would also appeal to more talented youth because of the combination of a decent earning opportunity during the apprenticeship and good future career options. Originality/value This paper provides novel and direct empirical evidence regarding the framework conditions within the Spanish apprenticeship system, thus incentivizing both firms and individuals to participate in dual apprenticeship training programs.

PurposeThe paper aims to test whether a firm's provision of training depends on the intake quality of trainees. While a firm may just treat each trainee equally, independent of his or her intake quality, firms may alternatively also provide more training to less able individuals or focus on the most able ones. The authors develop a theoretical framework that illustrates under what circumstances a firm chooses a particular training strategy.Design/methodology/approachThe paper uses representative administrative survey data for more than 1,400 Swiss establishments. To test their theoretical predictions about a firm's training strategy, the authors apply multivariate and instrumental variable (IV) regression models. In addition, they use case study evidence from a large Swiss retailer, allowing them to analyze how different instructors in a specific firm react when confronted with apprentices of different intake qualities.FindingsThe authors find that a firm's training strategy depends on a trainee's intake quality and the expected net costs of a particular training occupation. Although firms generally provide less training to less qualified trainees, the authors find that a firm is willing to compensate low‐ability trainees with additional training when training is on average profitable in the short run.Practical implicationsWhen training regulations force firms to follow an investment‐oriented training strategy (net costs in the short run), then low‐ability trainees will not receive additional instruction time and the dropout risk increases.Social implicationsGenerating a regulatory framework that allows firms to achieve a net benefit from work‐based training is crucial for low‐ability trainees to have the opportunity to receive additional training investments that compensate for a lack of competences when training commences.Originality/valueThis paper provides novel and direct empirical evidence on how firms adjust their training provision when faced with heterogeneity in the ability of their trainees.