DP1311 | Is the German Apprenticeship System a Panacea for the US Labour Market?

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Advocates of apprenticeship programmes often argue as if it is simply a matter of historical accident that such investment by US firms has been hindered. This paper explores the structure of incentives underpinning the German system of apprenticeship training. First, we describe three characteristics of the German labour market that might lead firms to accept part of the cost of general training, even in the face of worker turnover. In the second part of the paper, we compare labour market outcomes for apprentices in Germany and high school graduates in the United States. Apprentices in Germany occupy a similar station within the German wage structure as that held by high school graduates in the US labour market. Finally, we provide evidence that the problem of forming labour market bonds is particularly acute for minority groups ? in Germany as well as in the United States. We discuss some implications for the vocational training debate in the United States.