SOTA Review

Who benefits from apprenticeships? The English experience. SOTA Review No 24

Apprenticeships are paid jobs incorporating on- and off-the-job training. Traditionally they have been seen as a route for young people to transition from education to productive skilled employment. In practice apprenticeships are very diverse – in terms of age of apprentices and levels and quality of apprenticeships.
In England an ongoing programme of reform is seeking to increase the number of apprenticeships while at the same time rationalising the range of apprenticeships available, making them more attuned to employers’ skills needs and enhancing their quality. Perhaps the single most prominent reform is the introduction of an apprenticeship levy for large firms in 2017, which was followed by a reduction in apprenticeship starts.
The evidence suggests that there are positive returns to individuals in terms of earnings from apprenticeships but their size varies markedly by gender, sector and apprenticeship level, with bigger returns for men than for women (in part explained by gender segregation by sector) and for advanced, higher and degree level than for intermediate level apprenticeships. Employers benefit from the supply of skills provided by apprenticeships but in their decision-making about investing in apprenticeships are concerned to trade-off costs (e.g. wages, training and supervision costs) versus benefits (i.e. the productive contribution of apprentices). Net costs and benefits and associated payback periods vary markedly by sector and apprenticeship level.

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