Friday, June 1, 2012

Bryan Caplan on Robert Lerman and Apprenticeships

Bryan discusses a talk by Robert Lerman, a mentor of mine at The Urban Institute and American University, here. While I think Bryan's pure signaling view of formal education is nonsense, I do obviously agree with his enthusiasm for vocational education and apprenticeship.

One of Bryan's commenters asks: "Pardon my ignorance, but in an apprentice system, what is the incentive for the "trade masters" to participate in the program and train their future competition?"

There is one point to make on this, and one shot at an answer. First, modern apprenticeships don't really work like the ones you read about from the Middle Ages (or the Sith Lords, for that matter). It's not a master taking on a young guy and training him in the ways of the trade. Apprenticeship is a training method that firms use that combines classroom training with on-the-job training, and it usually also involves a wage progression. So there is no "master training his competition" per se. It's more a matter of a firm using a particular training model

But, there's still a question of non-firm-specific human capital investments that the apprentice can always take to another firm. That is a legitimate problem to consider. I was once interviewing a guy that ran an apprenticeship program for CNAs in South Carolina (on a project with Bob Lerman, in fact), and he made an interesting point on this. He said that that's true, and there are competitors in the area that people occasionally leave to work for. But he said that the cost to his firm of having a poorly trained workforce far exceeds the cost of losing trained workers to the competition.

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