DIW Applied Micro Seminar

Abstract: Through social interaction in the workplace, coworkers are likely to learn from each other (knowledge spillover) and this may extend the returns to firm-provided training from trained workers onto untrained coworkers. Based on German matched-employer employee data covering the universe of employees we investigate whether unskilled workers derive long-term career benefits if they were exposed during their first job to high-quality apprenticeship graduates in the same workplace. After controlling for a large range of confounding factors, we find evidence for positive long-run effects, which hold after leaving the initial firm and conditional on the quality of future peers. Moreover, effects are up to three times larger if the initial occupation has high skill content and task complexity. Overall, analysis suggests that there are positive external effects of apprenticeship training programmes via knowledge spillover onto unskilled coworkers.