Investing in apprenticeships: what does the evidence say?

What does the evidence say on apprenticeships?

Last week we were in Birmingham – the City of a Thousand Trades – to talk about the initial findings of our review into the local economic impact of apprenticeships.

In their recent manifestos, all parties promised more and better apprenticeships, with the new Conservative government promising to deliver 3 million extra over the parliament. The government’s drive for more people to think about taking up an apprenticeship, and for more firms to start offering them, is clear by the widespread advertising campaign by the National Apprenticeship Service. With only around 150,000 apprenticeships being offered and taken up in 2013/14, that number will need to rise to 600,000 a year throughout this parliament. The scope for improvement – and error – in this roll out is huge.

So while it’s clear that apprenticeships are almost universally viewed as a ‘good thing’ across the political spectrum, we wanted to find out how exactly they impact on the wages and employment prospects of apprentices, the productivity of firms, and how differently designed schemes can affect effectiveness.

Among other findings, we have some relatively clear conclusions from our work: apprenticeships have a positive impact on participants’ employment; we have clearer evidence of employment effects than wage effects; and that many of the tools used to promote entry and prevent dropouts – wage subsidies, feeder schemes – seem to work well.

One of the areas we are less clear on is how apprenticeships affect employers. The few studies we have suggest they are good for firms – and employer surveys are very positive – but we need more concrete evidence here.

The group of practitioners and experts we talked with in Birmingham thought that this reflected their experience. They cautioned, however, that the term ‘apprenticeships’ hides a variety of different programmes. Many of the studies we looked at came from Germany, a country where the particular educational set up and industry mix differs from the UK. None of our findings are wholly driven by German data, but we certainly need to take this into account for UK practitioners.

The most troubling conclusion is the lack of UK-based studies we could look at. More local powers in the UK for areas, led by firms, to experiment with programme design, and with rigorous evaluation, would give us a much more enlightening evidence base to guide future programmes

The group in Birmingham agreed that making sure that local experimentation and innovation adds to a larger evidence base is a challenge. Building a framework that would allow smaller areas to aggregate results of local experimentation into more significant numbers could be one approach; setting apprenticeship policy at the city-region scale, with lotteries to break selection effects, would be another way to get meaningful results.

Whatever route is taken, making sure that evaluation is baked in from the design stage for apprenticeship programmes will be necessary for employers and apprentices alike to get the most out of these schemes.

The review will be completed and published in July.

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