Dual Training Pays off When Changing Employers

Dual apprenticeship training provides future professionals with marketable qualifications. Professionals who leave the company after their apprenticeship training and change their employer after the training period receive a wage mark-up which on average is 0.6 percent higher than for professionals who stay in the training firm. The percentage of the wage mark-up for professionals depends on their schooling background (e.g. Abitur, the higher education entrance qualification in Germany) and their occupation. On average, professionals with upper secondary education can expect a higher wage mark-up. In the worst case, a change of employers can lead to lower wages. These are the findings of a recent study conducted by the Centre for European Economic Research (ZEW) in Mannheim.

The study compares the wage difference between apprentices who change their employers or occupation after their training period with apprentices who stay in the training firm and their occupation to determine how much school education and company training value on the labour market. Official wage information of about 50,000 apprentices at the end of their training and the first employment as professionals in Germany has been used for the study.

The calculations indicate that professionals in all economic sectors and all schooling backgrounds receive on average a wage mark- up of 0.6 percent when changing employers after their training period than professionals who stay in the same firm. Future professionals work efficiently in new firms. Therefore a change of employers after the training period may be an interesting option for apprentices. In particular young professionals with upper secondary education benefit from a change to a new employer. On average, they receive 4.5 percent more wages. According to Prof. Dr. Thomas Zwick, ZEW research professor responsible for the study, the high wage mark-up is based on the fact that many professionals with upper secondary education have the choice of working for many firms as well as the attractive option of a university career.

Apprentices in commerce and trading occupations strongly profit from an employer change. On average they receive a wage mark-up of 3.2 percent. Employer and occupation changers in industrial occupations face large wage disadvantages. On average, professionals earn 2.4 percent less when changing employers than those who stay in the same firm. Zwick explains that changing employers straight after the training period is not very common in the industrial sector. Professionals who have to change their employer are stigmatised to a certain degree and therefore face wage disadvantages. A reason for the lower wages may be the specific training which often is specially tailored for the companies. However, the wage mark-up after the training period is rather high in industrial occupations. Therefore, the professionals in the industrial sector who change employers only have a relative disadvantage. In comparison to professionals in other sectors they even do better.

Professionals who change employers in the manufacturing and construction sector hardly face any financial consequences. Moreover, the study demonstrates that characteristics like firm size, location or economic sector do not have a significant impact on the percentage of the wage mark-up when professionals change employers after the training period.

For further information please contact

Prof. Dr. Thomas Zwick, Phone: +49/89/2180-5616, E-mail: zwick@bwl.lmu.de