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Defining Apprenticeship and Explaining Its Advantages

Apprenticeship training is a highly developed system for raising the skills and productivity of workers in a wide range of occupations, with demonstrated success abroad and scattered examples of success domestically. Apprentices are employees who have formal agreements with employers to carry out a recognized program of work-based and classroom learning as well as a wage schedule that includes increases over the apprenticeship period. Apprenticeship prepares workers to master occupational skills and achieve career success. Under apprenticeship programs, individuals undertake productive work for their employer; earn a salary; receive training primarily through supervised, work‐based learning; and take academic instruction that is related to the apprenticeship occupation. The programs generally last from 2 to 4 years. Apprenticeship helps workers to master not only relevant occupational skills but also other work‐related skills, including communication, problem solving, allocating resources, and dealing with supervisors and a diverse set of co‐workers. The course work is generally equivalent to at least 1 year of community college.

In Austria, Germany, and Switzerland, extensive apprenticeships offer a way of upgrading the quality of jobs, especially in manufacturing, commercial, and managerial positions. [1] In these countries, apprenticeships begin mostly in the late high school years, absorbing 50–70 % of young people on their way to valued occupational qualifications (Hoffman 2011). OECD reports (2009, 2010) highlight the role of a robust apprenticeship system in limiting youth unemployment.

Apprenticeships within the U.S. and elsewhere show how construction occupations can reach high wages and high productivity. The question is whether the model can be extended and attract firms to upgrade other occupations. Apprenticeship expansion holds the possibility of substantially improving skills and careers of a broad segment of the U.S. workforce. Completing apprenticeship training yields a recognized and valued credential attesting to mastery of skill required in the relevant occupation.

Apprenticeships are a useful tool for enhancing youth development. Unlike the normal part-time jobs of high school and college students, apprenticeships integrate what young people learn on the job and in the classroom. Young people work with natural adult mentors who offer guidance but allow youth to make their own mistakes (Halpern 2009). Youth see themselves judged by the established standards of a discipline, including deadlines and the genuine constraints and unexpected difficulties that arise in the profession. Mentors and other supervisors not only teach young people occupational and employability skills but also offer encouragement and guidance, provide immediate feedback on performance, and impose discipline. In most apprenticeships, poor grades in related academic courses can force the apprentice to withdraw from the program. Unlike community colleges or high schools, where one counselor must guide hundreds of students, each mentor deals with only a few apprentices.

Apprenticeships are distinctive in enhancing both the worker supply side and the employer demand side of the labor market. On the supply side, the financial gains to apprenticeships are strikingly high. U.S. studies indicate that apprentices do not have to sacrifice earnings during their education and training and that their longterm earnings benefits exceed the gains they would have accumulated after graduating from community college (Hollenbeck 2008). The latest reports from the state of Washington show that the gains in earnings from various education and training programs far surpassed the gains to all other alternatives (Washington State Workforce Training and Education Coordinating Board 2014). A broad study of apprenticeship in 10 U.S. states also documents large and statistically significant earnings gains from participating in apprenticeship (Reed et al. 2012).

These results are consistent with many studies of apprenticeship training in Europe, showing high rates of return to workers. One recent study managed to overcome the obstacle that such studies tend to face where unmeasured attributes explain both who is selected for an apprenticeship and how well apprentices do in the labor market (Fersterer et al. 2008); the authors did so by examining how an event unrelated to the apprenticeship (the firm staying in or going out of business) caused some apprentices to have full apprenticeships while others found their apprenticeships cut short. The estimates indicated that apprenticeship training raises wages by about 4 % per year of apprenticeship training. For a threeto four-year apprenticeship, post-apprenticeship wages ended up 12–16 % higher than they otherwise would be. Because the worker's costs of participating in an apprenticeship are often minimal, the Austrian study indicated high overall benefits relative to modest costs.

On the demand side, employers can feel comfortable upgrading their jobs, knowing that their apprenticeship programs will ensure an adequate supply of welltrained workers. Firms reap several advantages from their apprenticeship investments. They save significant sums in recruitment and training costs, reduced errors in placing employees, avoiding excessive costs when the demand for skilled workers cannot be quickly filled, and knowing that all employees are well versed with company procedures. Because employers achieve positive returns to their investments in apprenticeship, the worker and the government can save significantly relative to conventional education and training. After reviewing several empirical studies, Muehlmann and Wolter (2014) conclude 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…”

One benefit to firms rarely captured in studies is the positive impact of apprenticeships on innovation. Well-trained workers are more likely to understand the complexities of a firm's production processes and therefore identify and implement technological improvements, especially incremental innovations to improve existing products and processes. A study of German establishments documented this connection and found a clear relationship between the extent of in-company training and subsequent innovation (Bauernschuster et al. 2009). Noneconomic outcomes are difficult to quantify, but evidence from Europe suggests that vocational education and training in general is linked to higher confidence and self-esteem, improved health, higher citizen participation, and higher job satisfaction (Cedefop 2011). These relationships hold even after controlling for income.

In the United States, evidence from surveys of more than 900 employers indicates that the overwhelming majority believe their programs are valuable and involve net gains (Lerman et al. 2009). Nearly all sponsors reported that the apprenticeship program helps them meet their skill demands—87 % reported they would strongly recommend registered apprenticeships; an additional 11 % recommended apprenticeships with some reservations. Other benefits of apprenticeships include reliably documenting appropriate skills, raising worker productivity, increasing worker morale, and reducing safety problems.

While apprenticeships offer a productivity-enhancing approach to reducing inequality and expanding opportunity, the numbers in the U.S. have declined in recent years to about one-tenth the levels in Australia, Canada, and Great Britain. Some believe the problems are inadequate information about and familiarity with apprenticeship, an inadequate infrastructure, and expectations that sufficient skills will emerge from community college programs. Others see the main problem as an unwillingness of U.S. companies to invest no matter how favorable government subsidy and marketing policies are. In considering these explanations, we should remember that even in countries with robust apprenticeship systems, only a minority of firms actually hires apprentices. Because applicants already far exceed the number of apprenticeship slots, the main problem today is to increase the number of apprenticeship openings that employers offer. Counseling young people about potential apprenticeships is a sensible complementary strategy to working with the companies, but encouraging interest in apprenticeship could be counterproductive without a major increase in apprenticeship slots.

The high levels of apprenticeship activity in Australia, Great Britain, and Canada demonstrate that even companies in labor markets with few restrictions on hiring, firing, and wages are willing to invest in apprenticeship training. While no rigorous evidence is available about the apprenticeship's costs and benefits to U.S. employers, research in other countries indicates that employers gain financially from their apprenticeship investments (Lerman 2014).

Although apprenticeship training can prepare workers for a wide range of occupations, including medicine and engineering, apprenticeships are perhaps most appropriate for skilled positions that do not require a B.A. degree. A key question is whether these are the very jobs the country is losing and, if so, whether sufficient jobs amenable to apprenticeship will remain.

  • [1] For a list of occupations using apprenticeships in several countries, see the occupational standards section of the American Institute for Innovative Apprenticeship website at innovativeappren-
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