While apprenticeships are an important part of the workforce training system, their numbers have continued to decline in the United States. Apprentice dropout (attrition) is identified as the primary concern that discourages employers from investing in this training (Lerman, Eyster, & Chambers, 2009; Steward & O’Brien-Turco, 2010). Past research shows employers who adopt cooperative strategies with other stakeholders can lower the risk of apprentice dropout, but the factors that contribute to this difference, including whom these employers cooperate with, are unclear (Berik & Bilginsoy, 2000; Bilginsoy, 2003; Glover & Bilginsoy, 2005). The effectiveness of cooperative strategies and the impact of training outcomes on investment decisions are the two main focuses of this study.
Applying an Institutional Analysis and Development (IAD) framework, this study systematically inquires into the factors that contribute to the underdevelopment of apprenticeship programs. Specifically, this study examines how cooperative strategies lead to training outcomes and what impact these outcomes have on employers’ apprenticeship investment. Here, institutions are referred to a shared strategy among stakeholders to cope with common problems. The analysis of institutions is structured and nested into three levels, which are the constitutional, collective-choice, and operational levels. Four types of strategy at the constitutional level and one strategy at the collective-choice level, together with their theoretical hypotheses, are discussed and analyzed. A feedback model is then built to examine the impact of outcomes on previous levels.
Empirically, the data used in this study is from employers and education institutions in the state of Ohio. Our sample consists of 6,986 of the apprentices trained by 520 employers between 2007 and 2008. Their training and education performances are tracked over a four-year period. Event history techniques are employed to assess the impact of various factors on training outcomes. Then, a regression model is used to determine how these outcomes in turn affect employers’ training decisions. In this model, 370 employers in 2007 are used as a reference group for how past training outcomes affected their decision-making in 2010.
The findings of this study suggest that joint programs, in which a single employer adopts a strategy of cooperation with unions at constitutional level, have a lower risk of apprentices dropping out, compared with programs held by employers unilaterally. The dropout risk decreases when the apprentices receive their training in joint programs. The impact of joint programs are profound when employers cooperate with colleges at the collective-choice level. In this setting, we find the log-odds of dropout increase by four times for programs that cooperate with other employers, while the log-odds decrease by half for those that cooperate with unions. We also find that one apprentice dropout in 2007 decreased the number of dual enrollments in 2010.
There were four major conclusions. First, at the constitutional level, employers who hold apprenticeships jointly with unions (labor-management strategy) retain their apprentices longer. The impact is stronger if employers cooperate with unions only. Second, at the collective-choice level, apprentices who maintain dual enrollment in both their apprenticeships and in two-year colleges tend to lower their probability of dropout. The impact is stronger in programs that cooperate with other employers. Third, at the operational level, employers’ promise of wage increases for workers who attain journeymen status have greater impacts on retention than any of the other predictors from human capital theory. Lastly, apprentice dropout has a strong impact on the sustainability of resource regimes, compared to training completion. Failure to recoup its cost also negatively affects employers’ decision to invest in general training.
Overall, this research seeks to provide a tentative answer to the question of when and under what conditions institutions matter in the restoration of an apprenticeship system. The results of our study not only confirm previous findings on apprenticeships, but highlight the importance of the choices among institutional strategies adopted by these programs. Our recommendations are tailored for practitioners as follows. First, attention should be paid to the dropout issue in apprenticeship programs, especially for first-year enrollers, females, and minorities. Second, cooperation with colleges can be an effective strategy for overcoming high attrition in the first year, but it should be used with caution due to its negative impact on apprentices who have lower educational attainments. Third, we recommend shortening training duration to two years so that dropout risk can be controlled and the length can match the course offerings of two-year institutions. Fourth, we recommend restoring traditional union apprenticeship programs in the construction industry, but this strategy should be adopted with caution because of its potentially negative impact on females and minorities.