Increasing education levels are contributing to improved productivity.
The purpose of this research is to examine whether, for those who have left full-time education, a low-skill job provides them with a good start to their working lives. It was found that starting out in a low-skill job gives lower payoffs than starting out in a high-skill job. Five years after leaving full-time education, the wage penalty (after conditioning on education and other characteristics) still exists but this scarring effect diminishes over time. However, any job is better than having no job.
This paper updates an earlier paper by Karmel and Mlotkowski and looks at how the probability of getting a job, in addition to wages, impacts on completion rates. It finds that for trade apprentices the premium (or extra wage completing an apprenticeship brings) attached to becoming a tradesperson is a significant factor, whereas for non-trade trainees the training wage matters more. It also finds that the probability of employment for an apprentice or trainee on completion is greater than if they drop out; this particularly affects completion rates for trades and females in non-trade occupations. Finally, the economic downturn significantly increased the attractiveness of apprenticeships and traineeships.