In Switzerland there is a positive correlation that leads to a net benefit for the company conducting an apprenticeship. Extensive research has been conducted on the cost-benefit ratio of apprenticeships.
Costs and benefits of apprenticeship
For each apprenticeship in the different sectors, the cost-calculations are different. The gross cost of an apprenticeship position for a company is between CHF 20,000 and CHF 30,000 per year. Some apprenticeships are more expensive than others. Opposite to the gross cost of an apprenticeship position for a company, there is the average productive performance of an apprentice, which is between CHF 18,000 and CHF 36,000 per year. One factor of the gross cost is the apprenticeship salary, which in some EU member states is relatively low for Swiss apprentices. Roughly speaking, an apprentice in Switzerland earns about 12% of a typical salary for a given occupation in the first year of his/her apprenticeship.
Swiss studies on cost-benefit-ratio for companies
A study conducted by Strupler et al. (2012) analysed apprenticeship salaries. They showed the example of learners enrolled in a three-year VET programme in industrial painting; during the 1st year, the apprentice painter earns a gross annual salary of CHF 8,768 (~ EUR 8,000); in the 2nd year, CHF 11,566 (~ EUR 10,600); and in the 3rd year, the apprentices will receive CHF 18,534 (~ EUR 17,000). In total, the apprentice painter will have earned CHF 38,868 during his three-year apprenticeship from the host company, which includes monthly salary, 13th/14th month salary, special provisions and additional expenses. The study is a good indication of most VET programmes and the range of the salary from the lowest (about 30’000 CHF (~ EUR 27,000)) to the highest (about 68’000 CHF (~ EUR 62,000)) is quite large. The cost-benefit ratio always depends on national features like wage structures, labour market regulations, the education system, etc. It is therefore unlikely that Swiss results can automatically be applied to other contexts outside of Switzerland. With the help of cost-benefit analysis it was possible to prove that private rates of return on education for Swiss PE qualifications (professional college degrees and qualifications issued to those passing professional examinations) and higher education qualifications all show positive net benefits for the individual. However, the individual net benefits of an additional year of PE outweigh the net benefits of an additional year spent at a higher education institution. This means that the private costs of pursuing a PE qualification are almost always compensated by average income gains of 16-25%. These figures show how well tertiary-level education is developed for individuals who start with a VET programme at upper-secondary level and later decide to obtain a PE qualification.
Source: SERI Facts and Figures 2017, (20) Study by Strupler and Wolter 2012
Cost-Benefit Analysis Tool
Swiss researchers (Schweri et al. 2014) at SFIVET have been working on a tool for Cost-Benefit Analysis (CBA), which also enables ‘ex ante simulation’. With those simulations, it is be possible to analyse education systems in countries where apprenticeship training systems have not yet been introduced. The CBA-tool was designed to collect data and show simulations of the effect of changes in occupational curricula (reforms) in real time.
Source: SERI Facts and Figures 2017, (21) Study by Fuhrer and Schweri 2010
Materials and Links:
Costs and benefits of apprenticeships:
- Study by Wolter and Schweri (2003): Kosten und Nutzen der Lehrlingsausbildung aus der Sicht Schweizer Betriebe. (PDF)
- Wolter, C. & Mühlemann S. (2014), Return on Investement of Apprenticeship Systems for Enterprises: Evidence from Cost-Benefit Analyses. IZA Journal of Labour Policy, 3(25).
Swiss studies on cost-benefit-ratio:
- Strupler M., Wolter S. (2012), Die duale Lehre: eine Erfolgsgeschichte - auch für die Betriebe. Ergebnisse der dritten Kosten-Nutzen-Erhebung der Lehrlingsausbildung aus der Sicht der Betriebe. Zürich und Chur 2012. (in German)
- Cattaneo M. (2011), New Estimation of Returns to Higher Professional Education and Training, Em-pirical Research in Vocational Education and Training, 3(2), p. 71-84.
- Cattaneo, M. & Wolter, S. (2011), Der individuelle Ertrag einer höheren Berufsbildung. Die Volkswirtschaft. Das Magazin für Wirtschaftspolitik 12(1), pp. 63-66.