Description
Looking at apprentice and trainee data and employment data back to 1995, we find that declines in apprentice commencements lead declines in total trades employment by four quarters, whereas declines in trainee commencements appear to lag declines in employment in non-trade occupations. Based on this historical relationship, the reduction in apprentice and trainee numbers suggested a much larger decline in employment than eventuated. The low proportion of redundant apprentices who were able to resume training is concerning. However, because apprentice and trainee commencements rebounded so quickly, we anticipate only a minor interruption to the supply of tradespeople.
Summary
About the research
At the onset of the Global Financial Crisis (GFC) in 2008-09, the Australian training system experienced a sharp decline in the number of apprentice commencements. Ultimately, the impact of the economic downturn on employment levels in Australia was much more muted and both employment and apprentice and trainee numbers have returned to the pre-downturn level. This report examines the effect of the downturn on apprentices and trainees as well as investigating the relationship between apprentice and trainee numbers and the level of employment.
Key messages
- At the broad level, apprentice and trainee commencements are sensitive to changes in total employment.
- Changes to apprentice and trainee commencements precede changes in total trades employment by four quarters. Changes to trainee commencements appear to lag behind changes in employment in non-trade occupations but the relationship is not nearly as strong as for the trade occupations.
- When examined at the two-digit occupational level, the relationship between apprentice and trainee commencements and occupational employment is strong in trade occupations but not apparent in non-trade occupations.
- During the downturn, cross-sectional completion rates increased and cancellations and withdrawals from apprenticeships and traineeships decreased, although the size of the decrease was larger in the non-trade occupations.
- Of those apprentices and trainees who do not complete, a much higher proportion has discontinued their training because they lost their job or were made redundant. This was especially so in the trades occupations. Even so, the impact of the increase in redundancies is offset by a decline in apprentices and trainees leaving their job.
- Consequently, the short-lived downturn had only a very small impact on the supply of tradespeople.
Tom Karmel
Managing Director, NCVER