What kind of support do firms prefer to hire apprentices in a recession?

Abstract

Abstract Apprenticeship training is strongly developed in Switzerland. During the Covid-19 pandemic, training firms however faced severe difficulties and many decided not to (or were unable to) hire apprentices. To minimize negative consequences, authorities from the canton of Geneva introduced a series of measures to support the creation of apprenticeship positions in 2020, among which the following four key measures for firms signing a new apprenticeship contract: (i) refund of the first three months of the apprentice’s wage, (ii) premium of CHF 3,000 for hiring an apprentice for the first time, (iii) premium of CHF 10,000 for firms who build a new network to jointly hire and train an apprentice, and (iv) three months’ notice for contract start date. Using a discrete choice experiment, answered by more than 800 employers, we investigate the firms’ preferences regarding the support measures. The refund of apprentices’ wage stands out as the preferred measure overall, regardless of firm size and training behavior (i.e., training or non-training). The other financial measures seem less desirable, but nevertheless have a positive impact on small firms’ decisions.

Keywords

• Apprenticeship training
• VET
• Covid-19
• Public policy
• Discrete choice experiment
• Conditional logit models