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Why Do German Firms Subsidize Apprenticeship Training? Tests of the Asymmetric Information and Mobility Cost Explanations
Vierteljahrshefte zur Wirtschaftsforschung, Vol. 70 (2001), Iss. 1 : pp. 102–106
9 Citations (CrossRef)
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1Nuffield College, Oxford and Centre for Economic Performance (CEP), LSE Centre for Economic Performance, London School of Economics, 11 Furnival St, London, WC2A 2AE, United Kingdom.
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Abstract
It is often observed that despite the famous prediction of Becker (1962) that firms will not pay for general training, German firms do in fact subsidize apprenticeship training. This paper examines two prominent solutions to this puzzle — “asymmetric information” and “mobility costs.” Our tests do not support the asymmetric information hypothesis, and, while they provide evidence consistent with a simple mobility cost explanation, we argue that this hypothesis is deficient in a number of other respects.