Employment prospects and firm-based training - Evidence from opening the Swiss-German border

Caroline Neuber-Pohl; Damiano Pregaldini; Uschi Backes-Gellner; Sandra Dummert; Harald Pfeifer

doi:10.1016/j.labeco.2025.102848

Employment prospects and firm-based training - Evidence from opening the Swiss-German border

Caroline Neuber-Pohl^*
, Damiano Pregaldini
, Uschi Backes-Gellner
, Sandra Dummert
, Harald Pfeifer

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

We study how improved wage opportunities for skilled workers affect firm-based training, using the 2002 opening of the Swiss labor market to German commuters as a natural experiment. The reform triggered a large outflow of skilled workers from German border regions, prompting firms to expand apprenticeship training. Using a Difference-in-Differences approach, we find a significant increase in the number of apprenticeships in affected firms in Germany despite unchanged apprentice wages. This pattern is consistent with an outward shift in apprentice supply: higher wages for skilled workers across the border made apprenticeships more attractive to young people. Our findings suggest that improvements in skilled workers' wage prospects, rather than adjusting apprentice pay, may help to address training gaps and alleviate skill shortages.

Original language	English
Article number	102848
Number of pages	25
Journal	Labour Economics
Volume	99
DOIs	https://doi.org/10.1016/j.labeco.2025.102848
Publication status	Published - 1 Apr 2026

JEL classifications

j21 - Labor Force and Employment, Size, and Structure
j22 - Time Allocation and Labor Supply
j61 - "Geographic Labor Mobility; Immigrant Workers"
r23 - "Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics"

Keywords

Skill shortage
Free movement of labor
Negative labor supply shock
Wage effects
Training incentives
Apprenticeship supply and demand
IMMIGRATION
IMPACT
INVESTMENT
WAGES

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10.1016/j.labeco.2025.102848Licence: CC BY

Cite this

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title = "Employment prospects and firm-based training - Evidence from opening the Swiss-German border",

abstract = "We study how improved wage opportunities for skilled workers affect firm-based training, using the 2002 opening of the Swiss labor market to German commuters as a natural experiment. The reform triggered a large outflow of skilled workers from German border regions, prompting firms to expand apprenticeship training. Using a Difference-in-Differences approach, we find a significant increase in the number of apprenticeships in affected firms in Germany despite unchanged apprentice wages. This pattern is consistent with an outward shift in apprentice supply: higher wages for skilled workers across the border made apprenticeships more attractive to young people. Our findings suggest that improvements in skilled workers' wage prospects, rather than adjusting apprentice pay, may help to address training gaps and alleviate skill shortages.",

keywords = "Skill shortage, Free movement of labor, Negative labor supply shock, Wage effects, Training incentives, Apprenticeship supply and demand, IMMIGRATION, IMPACT, INVESTMENT, WAGES",

author = "Caroline Neuber-Pohl and Damiano Pregaldini and Uschi Backes-Gellner and Sandra Dummert and Harald Pfeifer",

note = "Data availability The analyses use administrative data of the Institute for Employment Research (IAB) [IAB Besch{\"a}ftigtenhistorik (BeH) V10.06.00-202012] and the Establishment History Panel (BHP) 7519 v2. The data are social security data with administrative origin which are processed and kept by IAB, Regensburger Str. 104, D-90478 N{\"u}rnberg, [email protected], phone:+49 911 1790, according to the German Social Code III. There are certain legal restrictions due to the protection of data privacy. The data contain sensitive information and therefore are subject to the confidentiality regulations of the German Social Code (Book I, Sect. 35, Paragraph 1). The raw data, evaluation programs, and results have been archived by IAB in accordance with good scientific practice. Evaluation programs and results can be found in the Reproduction package. If you wish to access the full data for replication purposes, please contact Sandra Dummert ([email protected]). Please visit https://iab.de/en/facts-and-figures-2/data-access-for-replication-purposes/.",

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doi = "10.1016/j.labeco.2025.102848",

language = "English",

volume = "99",

journal = "Labour Economics",

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AU - Pregaldini, Damiano

AU - Backes-Gellner, Uschi

AU - Dummert, Sandra

AU - Pfeifer, Harald

N1 - Data availability The analyses use administrative data of the Institute for Employment Research (IAB) [IAB Beschäftigtenhistorik (BeH) V10.06.00-202012] and the Establishment History Panel (BHP) 7519 v2. The data are social security data with administrative origin which are processed and kept by IAB, Regensburger Str. 104, D-90478 Nürnberg, [email protected], phone:+49 911 1790, according to the German Social Code III. There are certain legal restrictions due to the protection of data privacy. The data contain sensitive information and therefore are subject to the confidentiality regulations of the German Social Code (Book I, Sect. 35, Paragraph 1). The raw data, evaluation programs, and results have been archived by IAB in accordance with good scientific practice. Evaluation programs and results can be found in the Reproduction package. If you wish to access the full data for replication purposes, please contact Sandra Dummert ([email protected]). Please visit https://iab.de/en/facts-and-figures-2/data-access-for-replication-purposes/.

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N2 - We study how improved wage opportunities for skilled workers affect firm-based training, using the 2002 opening of the Swiss labor market to German commuters as a natural experiment. The reform triggered a large outflow of skilled workers from German border regions, prompting firms to expand apprenticeship training. Using a Difference-in-Differences approach, we find a significant increase in the number of apprenticeships in affected firms in Germany despite unchanged apprentice wages. This pattern is consistent with an outward shift in apprentice supply: higher wages for skilled workers across the border made apprenticeships more attractive to young people. Our findings suggest that improvements in skilled workers' wage prospects, rather than adjusting apprentice pay, may help to address training gaps and alleviate skill shortages.

AB - We study how improved wage opportunities for skilled workers affect firm-based training, using the 2002 opening of the Swiss labor market to German commuters as a natural experiment. The reform triggered a large outflow of skilled workers from German border regions, prompting firms to expand apprenticeship training. Using a Difference-in-Differences approach, we find a significant increase in the number of apprenticeships in affected firms in Germany despite unchanged apprentice wages. This pattern is consistent with an outward shift in apprentice supply: higher wages for skilled workers across the border made apprenticeships more attractive to young people. Our findings suggest that improvements in skilled workers' wage prospects, rather than adjusting apprentice pay, may help to address training gaps and alleviate skill shortages.

KW - Skill shortage

KW - Free movement of labor

KW - Negative labor supply shock

KW - Wage effects

KW - Training incentives

KW - Apprenticeship supply and demand

KW - IMMIGRATION

KW - IMPACT

KW - INVESTMENT

KW - WAGES

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DO - 10.1016/j.labeco.2025.102848

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VL - 99

JO - Labour Economics

JF - Labour Economics

M1 - 102848

ER -

Employment prospects and firm-based training - Evidence from opening the Swiss-German border

Abstract

JEL classifications

Keywords

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