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We empirically investigate whether the relationship between the fraction of filled apprenticeships in a particular occupation in the past and the fraction of prospective apprentices having ...

Willingness to compete has been found to predict individual and gender differences in educational choices and labor market outcomes. We provide further evidence for this relationship by linking Swiss students' Baccalaureate school (high school) specialization choices to an experimental measure of willingness to compete. Boys are more likely to specialize in math in Baccalaureate school. In line with previous findings, competitive students are more likely to choose a math specialization. Boys are more likely to opt for competition than girls and this gender difference in competitiveness could partially explain why girls are less likely to choose a math-intensive specialization.

Many extensions of classical human capital theory regard labour market rigidities as a prerequisite for firms to invest in general training. From this perspective, the German labour market reforms since 2003 should have reduced their willingness to support the apprenticeship training system. This article demonstrates that, on the contrary, German firms did not abandon the training system but instead changed their training strategies after the implementation of the labour market reforms. We analyse the new training strategies that German firms deployed to cope with the increased labour market flexibility engendered by the labour market reforms. Switzerland, where no such reforms occurred, serves as the counterfactual. The results demonstrate that German firms successfully reduced the net costs of training by involving apprentices in more work and reducing non-productive tasks.

Although there is evidence that apprenticeship training can ease the transition of youth into the labour market and thereby alleviate youth unemployment, many policymakers fear that firms will reduce the number of apprenticeship positions during economic crises, thus exacerbating the problem of youth unemployment. Using recent panel data of Swiss cantons and dynamic regression models, we examine the relationship between newly created apprenticeships and the business cycle. The empirical results suggest that economic shocks induce a pro-cyclical, moderate response in the apprenticeship market, both immediately and in subsequent years.

Although interest in monopsonistic influences on labour market outcomes has revived in recent years, only a few empirical studies provide direct evidence on it. This paper analyses empirically the effect of monopsony power on pay structure, using a direct measure of labour market 'thinness'. We find that having fewer competitors for skilled labour is associated at the level of the establishment with lower pay for both skilled labour and trainees, but not for unskilled labour. These findings have potentially important implications for the economic theory of training, as most recent models assume that skilled pay is set monopsonistically but both unskilled and trainee pay are determined competitively. Our results support those assumptions for skilled pay and unskilled pay, but not for trainee pay.

We study gift exchange in a field experiment where a random subsample of participants in the Swiss Labour Force Survey received vouchers to be used in adult training. Actual voucher redemption can be traced, giving us the unique opportunity to study whether gift exchange in the form of participation in future rounds of the survey depends on the perceived usefulness of the gift. The group of voucher recipients as a whole has significantly higher response rates. There is considerable heterogeneity, however. Our results point to a long-lasting gift exchange relationship only for the subgroup that redeemed their vouchers.

Lifelong learning is often promoted in aging societies, but little is known about its returns or governments' ability to advance it. This paper evaluates the effects of a large-scale randomized field experiment issuing vouchers for adult education in Switzerland. We find no significant average effects of the voucher program on earnings, employment, and subsequent education 1 year after treatment. But effects are heterogeneous: low-educated individuals are most likely to profit from adult education, but least likely to use the voucher. In addition, the public voucher program appears to crowd out firm-financed training. The findings cast doubt on the effectiveness of untargeted voucher programs in promoting labor market outcomes through adult education.

A firm's decision to invest in the general human capital of its workers can be affected by labor market conditions. Firms located close to a large number of competitors might refrain from financing general training because skilled workers may be poached after completion of training. To better incorporate economic realities, we apply a novel definition of regional labor markets based on travel time rather than travel distance or political borders. Our results show that firms provide less training in dense regional labor markets, indicating that (potential) labor poaching affects the training behavior of firms. Moreover, the threat of poaching is relevant only if general training is financed by the employer.

We use a unique data set about the wage distribution that Swiss students expect for themselves ex ante, deriving parametric and non-parametric measures to capture expected wage risk. These wage risk measures are unfettered by heterogeneity which handicapped the use of actual market wage dispersion as risk measure in earlier studies. Students in our sample anticipate that the market provides compensation for risk, as has been established with risk augmented Mincer earnings equations estimated on market data: higher wage risk for educational groups is associated with higher mean wages. With observations on risk as expected by students we find compensation at similar elasticities as observed in market data. The results are robust to different specifications and estimation models.

When students themselves enjoy large degrees of freedom in determining the duration of their studies, it results in a fairly large degree of interindividual variance in terms of time-todegree. This paper investigates individual time-to-degree in a model where students determine the optimum time-to-degree whilst weighing up the cost against the consumption benefit accruing from an additional semester of studies. According to this model, the cost level and consumption benefit depend, in turn, on the general economic environment during the study period. An empirical investigation using a data set based on Swiss university graduates from 1981 to 2001 shows that changes in the unemployment rate, real interest rate, wage levels, and economic growth have a significant impact on individual time-todegree. These results are consistent with the conclusions derived from the theoretical model.

For the first time it has been made possible to merge a German and a Swiss firm-level data set that include detailed information about costs and benefits of apprenticeship training. Previous analyzes based only on aggregate data showed that the net costs of training apprentices are substantial in Germany, whereas apprenticeship training is on average profitable during the training period for firms in Switzerland, even though the two training systems are rather similar. This paper analyzes the reasons for these differences with matching methods. We simulate the impact of changes in certain parameters such as wages, apprenticeship system-related factors and allocation of tasks to apprentices on the cost-benefit ratio using the counterfactual values of the other country. The results show that most of the difference in the net costs of training between the two countries can be explained by a higher share of productive tasks allocated to apprentices in Switzerland and the differences in relative wages...

Considerable improvements in the measurement of costs and benefits of apprenticeship training from the perspective of training companies have been made in the past few years. They have helped to better understand, why some firms train and others do not. With these micro-data sets we are also able to analyse measures that would help to increase the supply of training posts in an economy. A simulation of the impact of financial incentives on the training propensity of firms is made and shows that such a measure would be highly inefficient from an economic perspective. Further improvements in data are expected and should give valuable guidance in the design of educational, fiscal and labour market policies with respect to apprenticeship training.

Labour market expectations and especially wage expectations are important determinants for individual schooling decisions. However, research on individual expectations of students is scarce. The paper presents the Swiss results of a survey that was conducted in ten European countries. Its main findings are that point estimates of wages after graduation are close to actual wages, whereas the expectations of the wage gain in the first ten years of professional experience exceed the actual wage gains significantly. We find that rates of return to education that are calculated on the basis of individual wage and cost expectations as well as individual time preferences can be explained partially by the seniority of students, the self‐perception of their academic performance and their subjective job perspectives.

A firm’s decision to engage in apprenticeship training is to a large extent determined by the cost-benefit ratio of such an investment compared to other alternatives of securing skilled workers. Empirical evidence shows that in a well-functioning apprenticeship training system, a large share of training firms can recoup their training investments by the end of the training period. As training firms often succeed in retaining the most suitable apprentices, offering apprenticeships is an attractive strategy to recruit their future skilled work force. In addition – as long as skills are standardised and nationally certified – those apprentices leaving the training firm after graduation ensure that other firms can recruit a sufficient number of skilled workers from the labour market. Firms themselves can influence the cost-benefit ratio of training to some extent, but an equally important or even bigger part of this ratio is determined by public policy: the educational system, training regulations and labour market institutions. To assess the efficacy and efficiency of such framework conditions in regard to the apprenticeship training system, their impact on the cost-benefit ratio of training for firms needs to be assessed ex ante as well as ex post. Unfortunately, so far only two countries (Germany and Switzerland) provide representative and periodic data on the costs and benefits of apprenticeship training that are suitable for such an analysis. Given the importance of adequate data to guide public policy, there is first of all a need for a stronger investment in data collection and data analyses. JEL-Codes I2, J24, J31.

The classical insider‐outsider theory explains involuntary unemployment by the bargaining power of insiders that prevents wages decreasing to the level of the reservation wages of unemployed outsiders. Extends the traditional argument about wages to a conflict of interest between insiders and outsiders about the schedule of working time. Argues that attempts to liberalize shopping hours often fail because of the resistance and arguments of retail sector employees (insiders) who fear that this would cause deterioration in their working conditions. This resistance leads to a reduction of employment possibilities for outsiders who would have been willing to work during fringe hours.

Wage expectations can play a significant role in a variety of economic areas. This study analyses the wage expectations of students who are on the verge of making a decision concerning their educational path or who have already reached such a decision. Since each student in our study has been asked to discuss expectations in relation to various educational scenarios, this data can be used to check certain human capital theory assumptions. It is possible to ascertain the wage effects which students expect from certain educational decisions. Moreover it is possible to assess the expected rates of return on education without asking the students directly. The results of this study make it clear that both in the USA and in Switzerland the wage expectations of students do not differ significantly from the cross-sectional labor market data, despite considerable heterogeneity in some cases.

Shows the results of a new model for calculating private rates of return to education. The so‐called “cost‐benefit‐model” takes into account the influence of the existing wage structure, institutional factors as the cost of education and the fiscal system and risk premiums for dropping out of school as well as differences in unemployment. The model produces results that are relatively easy to interpret at the economic policy level and can easily be used to simulate the effects of changing parameters. The first empirical results for Switzerland indicate that once educational costs have been deducted, wage‐earning advantages for different educational groups are insignificant. The empirical results speak against the political demand – at least in Switzerland – that those who directly benefit from education should pay more towards its costs.

Summary In many countries on the European continent, it is feared that public funding of tertiary education (university and non-university) leads to an undesirable redistribution of income “from the bottom up”. The calculation of private rates of return is one way of answering this and other questions. This article proposes a new model for calculating private rates of return to education, which on the one hand takes into account the influence of existing wage structures and such institutional factors as the cost of education and the fiscal system, and on the other hand produces results that are relatively easy to interpret at the economic policy level. The first empirical results for Switzerland indicate that once educational costs have been deducted, wage-earning advantages would be too insignificant for it to be possible to speak of redistribution of income „from the bottom up“ in any meaningful way.

The sudden slump in the labour market of the 1990s made it necessary for Switzerland to alter its labour market policy, which from being almost exclusively passive became an active policy. Indeed a lack of suitable qualifications can be considered as one of the main factors prolonging the unemployment of those concerned, in Switzerland. Even so, the policy of relying on massive continuous education and retraining programmes as the most efficient solution to this problem needs to be called into question. For many years a majority of those who now find themselves unemployed neglected the option of seeing to their own continuous education needs. The reasons for this inactivity at the individual level may well lie in the lack of financial incentives. This in turn is the result of a wage structure that is still very much linked to years of service, with education‐related differences in wages being very slight.

This paper is about the effects of unemployment on consumption behaviour through “job security” in Switzerland. Based on a behavioural model of consumption the paper establishes the links between job security and consumption empirically. In a second step, perceived “job security” as reported in the Swiss Consumer Survey is then connected with the labour market. The paper finds that the record high level of unemployment since 1991 has mainly caused the observed deterioration of the perceived “job security”. Two different scenarios of unemployment rates are then developed to show the quantitative effects unemployment had on perceived “job security” and finally through this measure of consumer confidence on consumption expenditures. In conclusion the unusually high number of unemployed have acted as a psychological shock to change the subjective assessment of “job security” to such a degree that significant changes in consumer behaviour have resulted.

This paper assesses the effectiveness of a social public procurement policy in Switzerland that gives firms that train apprentices’ a preferential treatment. We estimate the effectiveness of this social procurement policy on a firm’s training participation, training intensity, and training quality using information from a representative and large firm survey. The results show that although the policy increases the number of training firms, the effect is limited in size, as only small firms and firms operating in sectors where public procurement represents a large share of the business, are affected positively. As a robustness check we further exploit a natural variation in the incidence of public procurement policies across Cantons and apply a difference-indifferences strategy. The results from this robustness check lie within the range of the effect estimated exploiting the cross-sectional data. Furthermore, we find no evidence that firms offering training due of public procurement policies provide training of a below-average quality.

"This study uses the Swiss Graduate Survey data to investigate the determinants of job-education mismatch and the associated consequences on earnings while controlling for various ability and motivation factors, as well as socio-demographic, labor market and institutional characteristics. The results indicate that the likelihood of a job-education mismatch is significantly influenced by individual performance factors, such as final grades and study duration, and that the phenomenon affects approximately 15 % of university graduates. The study also shows that more than one-quarter of the individuals with a job-education mismatch 1 year after graduation are still working in a job that does not require a university degree 4 years later. In monetary terms, job-education mismatch is associated with a yearly wage penalty of approximately 4 - 10 % in the short to medium term." (Author's abstract, IAB-Doku) ((en))

This paper uses an original dataset from a survey conducted in Switzerland in 2007 to explore the dynamics of education policy preferences. This issue has largely been neglected in that most studies on welfare state attitudes do not look at preferences for education. We argue that education policy preferences vary along two dimensions: the distribution of resources across different sectors of the education system (that is, vocational training versus academic education) and the level of investment in education both from public and private sources. With regard to the former, the findings suggest that individual educational experience matters most, that is, individuals prefer to concentrate resources on those educational sectors that are closest to their own educational background. With regard to the latter, we find that affiliation to partisan ideologies matters much more than other variables. Proponents of the left demand more investment both from the state as well as from the private sector and oppose individual tuition fees.

The latest study investigating the cost-benefit ratio of apprenticeship training for Swiss companies has shown that most apprentices offset the cost of their training during their apprenticeship on the basis of the productive contribution of the work they perform. Given this outcome, it is worth investigating why so many firms choose not to train apprentices. Maximum-likelihood selection models were used to estimate the net cost of training for firms without an apprenticeship programme. The models show, firstly, that non-training firms would incur significantly higher net cost during the apprenticeship period if they would switch to a training policy and, secondly, that this less favourable cost-benefit ratio is determined less by cost than by absence of benefit. For the apprenticeship system as such the results indicate that, as long as training regulations and the market situation permit a cost-effective training of apprentices, companies do not need specific labour market regulations or institutions to offer training posts. In this respect, the Swiss findings might be of interest for the ongoing German discussion about the expected repercussions of a more general labour market deregulation on the apprenticeship training system.

In the 1990s unemployment rose to unprecedented heights in Switzerland. Beginning in the summer of 1990, when registered unemployment stood at 0.5 per cent of the labor force, the unemployment rate climbed continuously over the next 31/2 years to peak at 5.2 per cent in January 1994. No OECD country has experienced such a sharp relative increase in unemployment in such a short time span. Needless to say, it has come as a shock to Switzerland.

It is a widely held belief that apprenticeship training represents a net investment for training firms, the cost of which needs to be recouped after the training period. A new firm-level data set for Switzerland reveals large variation in net costs across firms and, remarkably, negative net costs for 60 per cent of all firms. We use these data to estimate the effect of net costs on the number of apprentices hired by a firm. The results show that the costs have a significant impact on the training decision but no significant influence on the number of apprentices, once the firm has decided to train. For policy purposes, these results indicate that subsidies for firms that already train apprentices would not boost the number of available training places.