How Rm-speciic Is German Apprenticeship Training ?

Firms participating in the German apprenticeship system do so voluntarily. Previous studies have found that on the average participating rms incur positive net cost from providing skills that appear to be easily transferable across rms. This is at variance with standard human capital theory that predicts that such training will be provided by rms operating in a com-petitve market only if workers bear all the cost of the training. This puzzle may be resolved if the training were found to be largely rm-speciic. In this paper, we try to estimate the degree to which German apprenticeship training is rm-speciic by comparing after-apprenticeship earnings of movers and stayers, as those who leave the training-rm forgo their share of any rm-speciic human capital accumulated during the apprenticeship. We obtain self-selectivity corrected estimates of the average earnings diierential by using both standard parametric as well as recently developed semiparametric techniques. On the average, we nd that there is no substantial earnings loss associated with leaving the apprenticeship rm for males. Our results provide evidence, though, for the hypothesis that the rm-speciic component of the training is considerably higher in large, industrial rms than in small rms in the crafts sector. 1 1 I am greatly indebted to Joel Horowitz and George Neumann for many helpful suggestions and disussions. Helpful comments were also made