Financing Apprenticeship Training: Evidence from Germany

Dietmar Harhoff, Thomas J. Kane

NBER Working Paper No. 4557
Issued in December 1993
NBER Program(s):Labor Studies

Much of the current discussion promoting apprenticeship programs in the U.S. proceeds as if it is simply a matter of historical accident or lack of imagination which has hindered human capital investment by U.S. firms. However, the cause may be rooted more deeply in our labor market institutions. This paper discusses the structure of incentives undergirding the German system of apprenticeship training. Many German firms face large net costs of apprenticeship training. Yet they continue to provide such training in spite of considerable worker turnover upon completion of the training. The simplest human capital model suggests that employers would be willing to finance only firm-specific training. Rather than engage in a futile debate over the general or specific nature of the skills being provided, we first describe and evaluate 3 characteristics of the German labor market which may lead firms to accept part of the cost of general training even in the face of worker turnover. We then attempt to understand why German workers and firms may be more willing to invest even in firm-specific skills than in the U.S.. Finally, we discuss some implications of these results for the current vocational training debate in the U.S..

download in pdf format
   (1384 K)

download in djvu format
   (430 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w4557

Published: Harhoff, Dietmar and Thomas J. Kane. "Financing Apprenticeship Training: Evidence from Germany." Journal of Population Economics 10, 2 (1997): 171-196.

Users who downloaded this paper also downloaded* these:
Soskice Reconciling Markets and Institutions: The German Apprenticeship System
Oulton and Steedman The British System of Youth Training: A Comparison with Germany
Acemoglu and Pischke w5605 Why Do Firms Train? Theory and Evidence
Acemoglu and Pischke w6357 The Structure of Wages and Investment in General Training
Blanchflower and Lynch Training at Work: A Comparison of U.S. and British Youths
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us