Supply Shocks in the Market for Apprenticeship Training

S. Muehlemann*, H. Dietrich, G. Pfann, H. Pfeifer

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


We present a model with heterogeneous inputs and constant elasticity of substitution to examine the possible effects of a supply shock in the market for apprenticeship training. The model’s predictions are tested using data from a German high school reform that led to a one-time increase in the supply of highly educated apprentices. A difference-in-differences estimation strategy exploits regional variation in the timing of implementation, and an instrumental variable approach identifies the supply shock effects. We find that apprenticeship contracts among individuals with a high school degree increased by 7%, while apprentice wages were unaffected by the supply shock. Moreover, we find no evidence of substitution effects, as the number of training contracts among individuals with a lower-level school degree did not decrease. Our model predicts that such effects may occur when wages are sticky for apprentices with a high level of education relative to their productivity, which signals inefficiencies in the market for apprenticeship training.
Original languageEnglish
Article number102197
Number of pages18
JournalEconomics of Education Review
Publication statusPublished - 1 Feb 2022


  • Apprenticeship market
  • Labor supply shock
  • School reform
  • Wage rigidity
  • PAY

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