The impact of access to apprenticeship on dropout and early labour market outcomes

The paper investigates the impact of a crucial feature of a dual VET (school-based education combined with an apprenticeship) programme on student outcomes, namely access to apprenticeships in the students’ chosen specializations. Our study population includes four cohorts of Norwegian students who enrolled in VET programmes 2010-2013, and we observe labour market and education outcomes at age 21-23. Access is measured as the ratio of number of contracts signed to the number of applicants by vocational specialization, county and year. The regression model includes fixed effects for specialization, county, and year, as well as interaction terms between specialization and year or specialization and county, and a wide array of student background characteristics. We find that, indeed, access to apprenticeship has a strong effect on the dropout risk for this student group: In our main regressions, increasing the ratio of number of contracts signed to the number of applicants has an implied elasticity of -1 with respect to the probability of not completing upper secondary by age 21. We also find effects, albeit smaller, on employment and on neither being in employment nor education. The results are robust to several specification and sensitivity checks.