Declining Firm Participation in Apprenticeship Training

The share of firms offering apprenticeship training in Germany has decreased over the last years. There might be various reasons for this development. On the one side, the firms' willingness to train apprentices might have declined. On the other side, the decrease of apprenticeship training activities may be due to changed framework conditions in the German economy. E.g., shifts in industry composition or the increasing number of (very) small firms might be of importance when it comes to explaining changes in the training market. In addition, we can assume that supply-side factors such as the declining number of school leavers due to demographic change or the increasing tendency among young people to study affect the firms' possibilities to train apprentices. As several studies show, the difficulties in matching training place supply with demand have increased in the German apprenticeship market in recent times. Especially small and medium sized enterprises as well as companies located in Eastern Germany have rising problems in finding (appropriate) applicants for apprenticeship training. 

Against this background, it is the aim of our paper to get a closer insight into the firms' training behaviour. We give an overview of the development of apprenticeship training activities of different types of firms and follow up the reasons for this development. In order to explain the decrease in the share of training firms, we do not only consider establishment characteristics like sector affiliation, firm size, business expectations, the structure of the workforce or the needs of skilled labour. We also take account of supply-side factors such as demographic developments in the relevant age cohorts. Our empirical analysis is based on data from the IAB-Establishment Panel, a representative survey of almost 16,000 firms which has been carried out annually in Germany for more than twenty years now. This multiple topic survey provides various information on the firms' apprenticeship training activities; e.g., on the number of aprenticeship contracts concluded or on potential difficulties in filling training place vacancies. Due to its panel character, the survey allows to analyse the variation in the firms' training behaviour over time.

First results show that mainly smaller establishments as well as companies located in Eastern Germany have refrained from offering apprenticeship training within the last years. This might be a hint that the rising matching problems on the German apprenticeship market affect the firms' decision of whether to train or not.