Training at Work: A Comparison of U.S. and British Youths

(1992) - David Blanchflower, Lisa Lynch

Journal:
Link:: http://www.nber.org/papers/w4037.pdf
DOI:: 10.3386/w4037
Links::
Tags:: #paper #NCDS #Transition #school-to-work
Cite Key:: [@Blanchflower1992]

Abstract

Recent initiatives, such as Apprenticeship 2000 and the Department of Labor report Work-BusedTraining (1989),have urged a reexaminationof apprenticeship training in the United States in order to bridge the skill needs of noncollege-bound youths. Much of this renewed focus has been inspired by the successful experience with apprenticeships in Germany. While there is much to learn from the German experience, many of the supporting structures of the apprenticeshipprograms in Germany will be difficult to replicate in the United States (see Soskice, chap. 1 in this volume, for a review of these structures). These structures include the long-term relationships between banks and firms, the greater link between schools and postschool training, and the influence of local chambers of commerce on the number of apprenticeships offered. Therefore, an examination of an apprenticeship program in a country which has an institutional structure closer to that in the United States would be informative.

Notes

“n 1964 Industrial Training Boards (ITBs) were created in Britain to promote the skill development of the work force. In particular, these ITBs could impose levies on employers to raise training funds to support an extensive apprenticeship program, and additional funds were provided by the” (Blanchflower and Lynch, 1992, p. 233) Important context for vocational programs

“government” (Blanchflower and Lynch, 1992, p. 234)

“n addition, over 90 percent of these release programs were undertaken at local colleges. This link between on-the-job training and the schools extended in other directions as well. In particular, many apprentices would take nationally recognized exams, during or at the completion of their training, to obtain qualifications beyond the formal apprenticeship.” (Blanchflower and Lynch, 1992, p. 234)

“Studies by Prais and Wagner (1983) and Steedman and Wagner (1987, 1989) documented in detail the differences in content and duration of training across apprenticeships in Germany and Britain. For example, training was more firm specific in Britain than in Germany, and in Britain apprenticeships were not being created in new growth industries such as computers.” (Blanchflower and Lynch, 1992, p. 234)

“In the 1980s the ITBs were dismantled by the Thatcher government, and the government ceased to subsidize apprenticeships. Apprenticeships in Britain have been rapidly replaced by a government-led Youth Training Scheme,’ which is administered at the local level by Training and Enterprise Councils (TECs)(see U.K. Department of Employment 1988). The structure of these TECs is based in part on the U.S. experience with Private Industry Councils, PICs. In particular, they are voluntary organizations and are local-based rather than industry-based. The TECs are not able to levy fees on local employers as the ITBs were and therefore depend on voluntary contributions by employers and government funds for training. This has resulted in problems with the TECs being underfunded.” (Blanchflower and Lynch, 1992, p. 234)

“All young people aged 16-18 who are not in school and are not employed must participate in YT in order to receive any benefit while not working. One consequence of YT has been the virtual abolition of youth “unemployment” in Britain for those aged 16-18. Work by Lynch (1985) on British school-leaver unemployment in the early 1980s indicated that there seemed to be a long-run cost (as measured by negative duration dependence in reemployment probabilities) of early spells of unemployment on subsequent labor market experience. Therefore, YT appears to be a substantial improvement over having 16-yearold school-leavers unemployed for their first years in the labor market.” (Blanchflower and Lynch, 1992, p. 234)

“Over the last decade the number of employer-supported apprenticeships in Britain has declined substantially. Estimates of the total number of apprentices, derived using self-assessmentfrom a sample of individuals in the Labour Force Survey, suggests a decline from 367,000 apprentices in 1979 to 318,000 in 1986: in manufacturing the numbers were 154,000 in 1979 and 106,000 in 1986.*Given the concentration of apprenticeships in manufacturing we would have expected some decline in their number, independent of the actions by the British government in the 1980s. Manufacturing employment collapsed from 7,113,000 in 1979 (31.5 percent of all employees), to 5,138,000 in 1986 (24.6 percent of all employees), and to 4,872,000 in March 1991 (22.3 percent of employees)(U.K.Department of Employment 1991, table 1.2). The decline in the number of apprentices was accelerated by an explicit policy on the part of the Thatcher government to replace apprenticeshipswith YT. Trade unions had used the apprenticeship system as a means of restricting entry to certain occupations (e.g., lithographic printers) where closed shops operated. Thus, replacing the apprenticeship system was seen as one way to reduce the power and influence of trade unions in the British economy” (Blanchflower and Lynch, 1992, p. 235) Vital timeline context

“The paper by Baker uses an empirical framework proposed by Lynch (1992) and data from the NCDS. Unfortunately, Baker only examines the returns to training for males in Britain and, as we will discuss later, ignores an important dimension of training in Britain-the link with formal qualifications.Dolton et al. have presented preliminary findings of the returns to YT schemes for youths in Britain in the 1980s. They are only able, however, to examine the labor market experience of youths in the first two to three years after leaving school, so few in their sample have actually completed their training programs” (Blanchflower and Lynch, 1992, p. 237)

“Elias and Blanchflower (1988) provide evidence of response bias: individuals with the lowest levels of attainment on the early ability tests were most likely not to respond to subsequent sweeps of the survey. The extent to which our estimates are affected by this sample attrition is the subject of current research.” (Blanchflower and Lynch, 1992, p. 238)

“here were a variety of training sources available for British youths during the 1970s, including primarily apprenticeships and company-sponsored training. The training programs were typically split between colleges and employer training centers and were usually full-time. In contrast, most apprenticeships provided a mix of training at the work site plus day-release programs run at local colleges. During this period in Britain, the use of non-employersponsored off-the-job training programs, of the U.S. type discussed above, was quite limited.” (Blanchflower and Lynch, 1992, p. 239)

“In 1974, when the NCDS cohort was 16 years old, approximately 59 percent of British youths were employed, 2 percent were unemployed, and 2 percent were out of the labor force. At that time more than 40 percent of male employees were apprenticed compared with only 8 percent of employed females. A further 6 percent of male employees and 4 percent of female employees were receiving some type of company training from their employers. By age 23, virtually all individuals had left their apprenticeships.” (Blanchflower and Lynch, 1992, p. 239)

“Table 8.1 Labor Market Status: Great Britain (NCDS),1974-81 (% of cohort)” (Blanchflower and Lynch, 1992, p. 240)

“Approximately nine out of ten individuals in the NCDS sample who completed apprenticeships also obtained some kind of qualification during or at the end of their programs.” (Blanchflower and Lynch, 1992, p. 242)

“A higher proportion of British females did not receive a qualification after their apprenticeships than was the case for men” (Blanchflower and Lynch, 1992, p. 242)

“In this section, we discuss whether the wage gains associated with the various types of training differ across the two countries. In order to provide econometric evidence on this issue, we estimated log hourly earnings for the two countries” (Blanchflower and Lynch, 1992, p. 245)

“Information is available in both the NCDS and the NLSY on gender, marital status, disabled status, the presence of children, experience, part-time work, findestablishment size, months of” (Blanchflower and Lynch, 1992, p. 245)

“tenure in the current job, race, union status, local unemployment conditions, training and qualifications, ability test scores, and number of jobs since leaving school, as well as on industry and region.” (Blanchflower and Lynch, 1992, p. 246)

“in Britain in 1981, ever having received training with the individual’s current employer (outside an apprenticeship)6 raised hourly earnings, on average, by 2 percent, ceteris paribus.” (Blanchflower and Lynch, 1992, p. 246)

“For those who completed an apprenticeship, earnings were found to be approximately 5 percent higher in an equation which also included a set of highest qualification dummie~.~ However, the wage gain to apprenticeships is even higher than this when we include the gain associated with additional qualifications received alongside apprenticeship.” (Blanchflower and Lynch, 1992, p. 247)

“Since the time period covered between the first and current jobs in table 8.8 varies between one and seven years, we have also repeated this analysis (not presented) on a group of respondents (64 percent of the sample), all of whom left school at the minimum school-leaving age of 16 in 1974 and whose first job was in that yea” (Blanchflower and Lynch, 1992, p. 251)

“YT schemes normally last for a maximum of only two years compared with an average duration of a completed apprenticeship in NCDS of around 43 months for men and 34 months for women (table 8.4).” (Blanchflower and Lynch, 1992, p. 256)

“t does appear that the decline in apprenticeships has created a gap in the training needs of companies that has been filled by an increase in other types of postschool training.1” (Blanchflower and Lynch, 1992, p. 256)

“here seems to be both good news and bad news associated with the YT programs of the 1980s in Britain. The good news is that female school-leavers seem to be receiving much more training than was the case under the traditional training and apprenticeship system in the 1970s. The bad news is that fewer young people are obtaining qualifications from their training programs.” (Blanchflower and Lynch, 1992, p. 258)