Description
Making use of the NCVER Apprentice and Trainee Destination Survey, this paper focus on wages and the impact they have on the decision not to continue with an apprenticeship or traineeship. The broad conclusion is that increasing training wages would have little effect on completion rates. For apprentices, it is the premium associated with becoming a tradesperson that counts, not training wages. For females in non-trade traineeships, there is no relationship between wages and completion rates. It is only for males in non-trade traineeships for whom increasing training wages would make a difference to completion rates. However, for this group there is, on average, only a modest premium to completion. This finding raises the question whether traineeships in some occupations sales for example—are contributing to increased skill levels in any substantive manner.Summary
About the research
Low completion rates in apprenticeships and traineeships have been of concern for many years. Explanations have been the low level of apprentice and trainee wages on one hand, and other factors such as the quality of workplaces and training, on the other. The focus of this paper is on wages and the impact they have on the decision not to continue with an apprenticeship or traineeship.
Key messages
- For most apprentices and trainees, expected wages in alternative employment are greater than wages during training. Apprentices and trainees are indeed being paid a training wage.
- Only for trade apprentices (specifically, electrotechnology and telecommunications, construction, and automotive and engineering) do expected wages on completion significantly exceed expected wages in alternative employment. For these occupations the value of completing the qualification is high. Thus the concept of a training wage, from the point of view of an investment in skills, makes obvious sense for apprentices in these occupations but less so in other occupations.
- We find that 'wedges' between the training wage, the wage in alternative employment and the wage on completion have a limited effect on completion. For apprentices it is the premium attached to completion that matters. For male non-trade trainees the wedge between the training wage and the wage in alternative employment does have an impact on completion. For females in non-trade traineeships we found no relationship between wages and the probability of completing a traineeship.
Thus the broad conclusion is that training wages should not be the focus of attention in increasing completion rates. The study also raises the question of whether traineeships in some occupations—sales, for example—are contributing to increased skill levels in any substantive manner. It would seem that many traineeships are more about employment than skills acquisition.
Tom Karmel
Managing Director, NCVER
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