Apprenticeship completions: Firm effects and training quality

Project Summary

Apprentice non-completion rates in many trade occupations are 50% or higher. This substantially increases firm training costs and opportunity costs for individuals, and stifles labour market responsiveness to fluctuating skills demands.  Existing studies of attrition have concentrated on apprentices’ characteristics. We propose to uses advances in latent variable techniques to exploit a large and unique Western Australian administrative dataset to generate insights into the contribution of individual firm effects to apprentice non-completion. While numerous individual characteristics have been shown to correlate with non-completion, it may be that high-turnover firms are more likely to attract individuals with a higher likelihood of non-completion. Unless there is clear evidence on the proportion of apprentice turnover that is firm driven, policy and funding to address non-completion may be misguided. Given this, the findings are expected to offer substantial policy implications for the design of the apprenticeship system. At the same time the generality of apprenticeship systems and the theoretical issues addressed means that the research will have applied and academic relevance internationally.