The Cost and Benefits of Work-based Learning

Dual apprenticeship training is increasingly seen as an important educational track that provides youth with the skills necessary for a smooth transition into the labour market. However, providing skills at the workplace rather than at (vocational) school comes at a cost for firms that hire such apprentices. Nonetheless, as apprentices become part of a firm’s workforce, they also generate a benefit from working productively. This paper provides a theoretical framework and the latest empirical evidence about a firm’s costs and benefits that are associated with offering dual apprenticeship training. While many aspects of such training are determined by external factors such as government policies, training regulations, and labour market institutions, firms can still influence many other aspects. The available empirical evidence suggests that there is no single optimal model of dual apprenticeship training. However, given the differences in the institutional setting across countries, adjusting key framework conditions can allow training firms to generate a sufficiently high return on their training investments. The main parameters affecting the cost–benefit ratio are apprentice wages, amount of training provided at the workplace, apprenticeship duration, and the manner in which firms integrate apprentices into the production process (to perform both skilled and unskilled tasks). An important prerequisite to successful apprenticeships, however, is also an adequate supply of suitable apprentices, which in turn (among other factors) depends on the training quality at the workplace, certification of the acquired skills, and future wages and career opportunities from obtaining a vocational qualification.