Production processes, tasks and skill requirements and their influence on the costs of apprenticeship training

Transcription

1 Productio processes, tasks ad skill requiremets ad their ifluece o the costs of appreticeship traiig Reate Neubäumer (Uiversity of Koblez-Ladau) Harald Pfeifer (Federal Istitute for Vocatioal Educatio ad Traiig, BIBB) Güter Walde (BIBB) Felix Wezelma (BIBB) T.A.S.K.S. (Techology, Assets, Skills, Kowledge, Specialisatio) Nürberg, May, 17 th ad 18 th 21

2 Motivatio Dual system of vocatioal educatio ad traiig (VET) i Germay => work force with certificable itermediate skills orderly school-to-work-trasitio ad low youth uemploymet Firms` costs of VET are (partly) very high => Cost-beefit-surveys (CBS) by the Federal Istitute for Vocatioal Educatio ad Traiig (BiBB) at regular itervals Average traiig costs dropped dramatically betwee 2 ad 27 from about 2, for a three-year traiig program i 2 to about 13, for the same traiig program i 27 Why?? hypothesis empirical test

3 Theoretical backgroud Tasks ad the Germa system of VET Overview Chages i productio ad orgaizatioal processes Chage of tasks traiig costs Chage of skill requiremets From the chage of tasks to the chage of traiig costs: hypothesis Empirical Test Dataset ad cost-beefit-model (CBM) Empirical strategy simple OLS-regressio o the pooled data matchig ad simulatio techiques Empirical evidece Coclusios

4 Firms' costs of vocatioal educatio ad traiig (VET) a t Gross costs: C = w + c + X Net costs: NC a t a a = (w + c + X) MP = C MP a w = wages of appretices t c = cost for the traiig persoel X = other traiig costs, e.g. expeses for material ad ifrastructure a MP = appretices' productive cotributios = beefits of traiig

5 Firms' returs of VET ( s u s u (MP MP ) (w w )) s s = P (MP w ) u u P supposig that (MP w ) s u MP, MP = productive cotributios of a graduated appretice ad a uskilled worker respectively s u w, w = wage of a graduated appretice ad a uskilled worker respectively P = probability that the graduated appretice will stay i the firm

6 Literature: Models of appreticeship traiig build o et costs of VET Productio-orieted models of traiig: Firms bear o et costs of traiig Ivestmet-orieted models of traiig Firms bear high et costs of traiig the Germa case ad (must) have returs of VET

7 Treds i work orgaizatio ad its drivig forces chages of productio processes ad orgaizatioal policies "retaylorizatio" decetralizatio stadardizatio globalizatio cost pressure world-wide productio icreased eed for flexibility world-wide demad due to techological progress techological progress relocatio of productio machies, robots fast chagig demad ad data processig icreased customer orietatio commuicatio ad iformatio system

8 Empirical evidece for these "treds" i work orgaizatio Large umber of case studies maufacturig sector e.g. electrical idustry, automotive maufacture, machie ad plat costructio service sector e.g. baks, isuraces, IT- ad multimedia compaies

9 Basis idea: Tasks at the work place have chaged ad ifluece et costs ad returs of VET firms' et-costs appreticeship traiig firms' returs a t a + c + X) MP s u s u P ((MP MP ) (w w )) ( w tasks skill requiremets

10 Retaylorizatio or returig to higher specializatio Reweighteig returs of specializatio coordiatig the activities of differet workers due to due to icreased eed of flexibility data processig. frequet coversios of productio ew iformatio ad. high labor turover commuicatio techologies cocept of process security (result of too complex productio processes)

11 Decetralizatio Specializatio did ot oly take place withi plats, but also betwee differet productio sites of the same compay "ew decetralizatio" "decetralized cetralizatio" worldwide especially relocatio of productio to coutries with low labor costs ad/or coutries with low-valued currecies

12 Stadardizatio The process of restructurig demaded stadardizatio, especially of tools software products work procedures That led to holistic productio cocepts e.g. automobile idustry baks auditig compaies..

13 From the chage of tasks to the chage of traiig costs The orgaizatioal restructurig of productio ad work led to: A greater heterogeeity of tasks ad skill requiremets may skilled employees. have fewer differet tasks. their tasks are more arrowly defied tha i the past some employees. have to carry out a icreasig umber of differet tasks. they eed multiple skills. Heterogeeous istead of homogeeous workgroups Less eed for geeral ad firm-specific expert kowledge ad more eed for social ad commuicative competece A chage i the traiig behavior of firms 1. Appretices' istructio at the workplace starts sooer they are assiged a small umber of differet tasks with lower skill requiremets ad less accidet-sesitive productio processes they ca lear "i the process" ad ca improve their social ad commuicative competece o the job. 2. The time appretices spet i iteral courses ad i compay traiig ceters is reduced.

14 Resultig hypothesis: Chages of work orgaizatio ad tasks led to - higher productive output of appretices ad - lower gross costs firms' et-costs appreticeship traiig firms' returs a t a + c + X) MP s u s u P ((MP MP ) (w w )) ( w tasks skill requiremets productio process ad orgaizatioal policies

15 Empirical Test Data Set = Cost beefit surveys (CBS) of the BIBB Two "idepedet" samples of firms i 2 (=1,991) ad 27 (=2,185) are pooled Depedet variable: firms' et costs Idepedet variables: firms' characteristics (structure variables, reveue ad labor market situatio) year-dummy parameters of the cost model to "costruct" the et costs Details see paper

16 Empirical Test Cost Model How were firms' traiig costs measured? 1. Direct measuremet (-> cost accoutig of the firms) e.g. wages of appretices expeses for materials 2. "Costructio" of costs as their direct measuremet is ot possible a) Productive cotributio of appretices: Appretices ca perform tasks that otherwise would be carried out by uskilled workers or skilled workers. MP + a u u s s s = h w ph w u s h, h = time o work usually doe by uskilled ad skilled workers respectively u s w, w = wage of uskilled ad skilled workers respectively s p = relative productivity measure (skilled work) b) Costs of traiers t c => Net costs are costructed see paper a t a a t t t u u NC = (w + c + X) MP = w + ((1 p)h w ) (h w + p s h s w s )

17 Descriptives Firms' et costs 2 27 Chage of firms' et costs Mea Std. Dev. Mea Std. Dev. absolute i % Firm-size < 1 employees to 49 employees to 499 employees or more employees Vocatioal field Idustry ad commerce Skilled crafts Agriculture Idepedet professios Ecoomic sector Maufacturig Wholesale ad retail trade Services I Services II Admiistratio/educatio/health Regio East West Compay traiig ceter No Yes Total Source: BIBB-Cost-Beefit-Survey (CBS) 2 ad 27

18 Empirical Test Descriptive Aalysis see paper discussio

19 o pooled data Empirical Test Simple OLS-Regressio depedet variable: et costs idepedet variables: variable of iterest: year-dummy cotrols: size; regio ecoomic sector; reveue situatio; labor market situatio, iteractio terms => 3 differet models Results (see table 3 i the paper): et costs are sigificatly lower i 27 (compared to 2). descriptive aalysis: et costs 27 et costs 2 = 2,236. year-dummy rages betwee 2,564 ad 2,48 => the large differeces i the et costs of traiig betwee 2 ad 27 caot be explaied by structural variables ad the reveue ad labor market situatio of firms Problem: It is ot possible simply to iclude the parameters of the (costructed) et costs i the OLS because they eter the depedet variable (et costs) by costructio

20 Net cost regressio Model I Model II Model III Year (27 = 1) *** *** *** Number of workers o the exteral labor market * * Matchig quality of workers from the exteral labor market 29.41** 314.2** ** Curret profit situatio Expected profit situatio * Expected developmet of the umber of employees Share of appretices with upper secodary educatio 29.23** ** Share of employees with tertiary educatio 45.72*** ** *** Years of traiig participatio Regio (West = 1) *** *** *** Firm-size Yes Yes Yes Vocatioal field Yes No Yes Ecoomic sector Yes No Yes Vocatio No Yes No Compay traiig ceter *** *** *** Iteractio Year/Regio Iteractio Year/Firm-size No No Yes Iteractio Year/Vocatioal field No No Yes Iteractio Year/Ecoomic sector No No Yes Iteractio Year/Traiig ceter *** Costat *** *** *** N R-sq p-values i secod row; * p<.1, ** p<.5, *** p <.1 Source: BIBB-Cost-Beefit-Survey (CBS) 2 ad 27

21 Empirical Strategy Matchig Aalysis as a "Way Out" Approach first developed by Dioisius et al. (29) (Compariso of firms' traiig costs i Germay ad Switzerlad) Nearest eighbour matchig (ofte used to evaluate ALMP) "twis" of similar traiig firms i 2 ad 27 matchig variables: size; regio ecoomic sector; reveue situatio; labor market situatio =>couterfactual values of the differet parameters i the cost-beefit model used to costruct the et costs parameters used i the matchig procedure. allocatio of tasks at the workplace. relative productivity level of appretices doig skilled tasks. days spet i traiig ceters ad i iteral courses. traiig hours. appretices' wage costs. traiers' wages Re-estimatio of the cost-beefit model: We replace step by step the parameters i the et cost equatio by couterfactual values =>we estimate the effect of hypothetically movig a firm step by step form 2 to 27 (ad vice versa).

22 Empirical Strategy assumptio of ucofoudedess or coditioal idepedece assumptio (CIA) see discussio

23 Empirical Strategy Re-Estimatio of the Cost-Beefit Model Procedure We replace step by step the parameters i the et cost equatio by couterfactual values =>we simulate the effect of hypothetically movig a firm step by step from 2 to 27 ad from 27 to 2 respectively Results ( see graph 4 i the paper: et costs with matched variables) The chage of the task allocatio has the biggest effect o the et costs:. Net costs of firms that trai i 27 would icrease by more tha 3, if they allocated the tasks for appretices as firms traiig i the year 2. Vice versa, et costs of firms traiig i 2 would drop by well over 2, if firms havig traied i 2 allocated appretices tasks i the same way as firms i 27. Compared to the effect of task allocatio, all other cost-beefit parameters icluded i this simulatio are of lesser importace.

24 Matchig results Source: BIBB-Cost-Beefit-Survey (CBS) 2 ad 27

25 Empirical Strategy Re-Ruig the Pooled OLS-Regressio with the Couterfactual Values for the Net Costs Results ( see table 4 ad 5 i the paper) The year-dummy decreases eormously, i.e. there would be early o differece i et traiig costs if the traiig behaviour of firms had ot chaged. The most importat factor resposible for the chage i et costs is the chage i allocatig tasks to appretices.

26 Net cost regressio with matched values Model I Model II Model III Year (27 = 1) Number of workers o the exteral labor market Matchig quality of workers from the exteral labor market 261.1** ** 265.9** Curret profit situatio Expected profit situatio Expected developmet of the umber of employees ** ** * Share of appretices with upper secodary educatio * * Share of employees with tertiary educatio *** *** *** Years of traiig participatio Regio (West = 1) *** *** *** Firm-size Yes Yes Yes Vocatioal field Yes No Yes Ecoomic sector Yes No Yes Vocatio No Yes No Compay traiig ceter *** *** *** Iteractio Year/Regio Iteractio Year/Firm-size No No Yes Iteractio Year/Vocatioal field No No Yes Iteractio Year/Ecoomic sector No No Yes Iteractio Year/Traiig ceter Costat *** *** *** N R-sq p-values i secod row; * p<.1, ** p<.5, *** p <.1 Source: BIBB-Cost-Beefit-Survey (CBS) 2 ad 27

27 Startig poit: Coclusios Chages i the orgaizatio of workig processes led to a redefiitio of tasks to be performed by workers. Hypothesis: This chage of tasks was a major reaso for the sharp decrease of firms' traiig costs Empirical Aalysis ad Results: Appretices sped more time o productive tasks ad less time o istructio or self-learig. The decrease i firms et costs of appreticeship traiig is maily drive by these chages i the orgaizatio of traiig. Alterativ explaatios for the decrease i traiig costs: Differeces i the ability of appretices. Chages i labor market istitutios resultig i. lower average teure. ad higher skill-specific wage-differetials. That could have reduced the firms willigess to accept high(er) traiig costs. Ivestig i huma capital becomes riskier leadig firms to either reduce their traiig costs or ot trai at all.

28 Further explaatios of the decrease of firms traiig costs: Lower returs of appreticeship traiig due to higher wage-specific wage differetial lower average teure firms' et-costs appreticeship traiig firms' returs a t a + c + X) MP s u s u P ((MP MP ) (w w )) ( w tasks skill requiremets productio process ad orgaizatioal policies

29 Empirical strategy assumptio of ucofoudedess or coditioal idepedece assumptio (CIA) = there are o uobserved covariates effectig both treatmet assigmet i.e. firms' decisio ot to trai ay loger (or to start traiig betwee 2 ad 27) outcome, i.e. parameters of the et costs!! There might be such uobserved covariates, but Rosebaum-boud aalysis shows the sesitivity of the treatmet effects to a violatio of the CIA is very very low, u s especially for the productive time of appretices ( h, h ) For our hypothesis it is ot so importat, if the effect of the chage of the productive time of appretices betwee 2 ad 27 would be 1% higher or lower. Crucial is that these parameters have by far the largest ifluece upo et costs.! That's differet from evaluatig ALMP.

30 1. Firms bear o et costs: NC = if Literature Models of appreticeship traiig buildig o et costs of VET MP + a a t = w + c X Productio-orieted models of traiig (see Lidley, 1975; Neubäumer, 1999; Fougère ad Schwerdt, 22) 2. Firms bear high et costs: NC >> if w = a u w u ( w = wage of a uskilled worker i period ) Ivestmet-orieted models of traiig (see Acemoglu ad Pischke (1998, 1999a, 1999b, 2) Fraz (1982), Kempf (1985), Lehe (1991), Neubäumer (1993, 1999) ) Firms (must) have returs of VET t t i.e. MP > w ad P >

31 From the chage of tasks to the chage of traiig costs The orgaizatioal restructurig of productio ad work led to: A greater heterogeeity of tasks ad skill requiremets may skilled employees. have fewer differet tasks. their tasks are more arrowly defied tha i the past. they ofte have skilled routie jobs. they eed less geeral ad firm-specific expert kowledge some employees. have to carry out a icreasig umber of differet tasks. they eed multiple skills. Heterogeeous istead of homogeeous workgroups Less eed for geeral ad firm-specific expert kowledge ad more eed for social ad commuicative competece A chage i the traiig behavior of firms 1. Appretices' istructio at the workplace starts sooer they are assiged a small umber of differet tasks with lower skill requiremets ad less accidet-sesitive productio processes they ca lear "i the process" ad ca improve their social ad commuicative competece o the job. 2. The time appretices spet i iteral courses ad i compay traiig ceters is reduced,

32 Coclusios Globalizatio ad icreasig cost pressure for firms lead to a redefiitio of tasks to be performed by workers Hypothesis: This had a impact o firms traiig costs Empirical aalysis shows that the decrease i firms et costs of appreticeship traiig was maily drive by chages i the orgaizatio of traiig: Appretices sped more time o productive tasks ad less time o istructio or self-learig A umber of alterative explaatios for the decrease i traiig costs exist Further research ecessary