Apprenticeships

Apprenticeships can improve young people’s prospects of earning better wages and securing long-term employment

Summary

The review considered more than 1,250 policy evaluations and evidence reviews from the UK and other OECD countries. It found 27 impact evaluations that met the Centre’s minimum standards.

What the Evidence Showed

  • There is some evidence that apprenticeships improve skill levels, and stimulate further training / study.
  • Apprenticeships can increase wages, although in a couple of evaluations effects are negative. Impacts also vary by type of participant.
  • Apprenticeships tend to have a positive effect on participants’ subsequent employment (and also reduce unemployment post-programme).
  • Level 3 or higher apprenticeships deliver substantially higher lifetime wage gains relative to lower level apprenticeships (based on the limited UK evidence available).
  • There is some evidence that apprenticeships are more likely to increase employment than other forms of employment training (unless that training also involves an in-firm element). The evidence of impact on wages is more mixed and appears to vary by gender.
  • There is some evidence that identifies mechanisms that may increase entry into apprenticeships and attendance during the programme (e.g. pre-qualifications, higher wages and subsidies to individuals). However, we have less evidence on what works to ensure people complete apprenticeships.

Where the evidence was inconclusive

  • It is unclear whether the duration of the apprenticeship matters for effects on wages or employment (although longer apprenticeships that deliver higher qualifications may have more positive effects)

Where there was lack of evidence

  • There is some evidence that firms participating in apprenticeships experience economic gains, such as higher productivity or profits. This fits with survey evidence, but more impact evaluations are needed.
  • There is too little evaluation evidence to draw clear conclusions on whether apprenticeships work better in some sectors than others.
  • There is some evidence that post-apprenticeship moves can increase wages although effects depend on circumstances.
  • There is no impact evaluation evidence looking at the effect of apprenticeships on a given local area (rather than individual participants or firms).
  • There is no impact evaluation evidence comparing the effects of nationally run programmes versus locally run programmes.
  • Existing ex-ante modelling suggests that the economic benefits of apprenticeships comfortably outweigh their costs. However, only one of the impact evaluations provides cost data in a form which allows us to calculate ex-post benefit-cost ratios for that programme.
  • None of the shortlisted studies look at the effects of substantially scaling up apprenticeship provision, as is currently happening in the UK. We need more evidence on whether identified benefits also hold in a larger programmes. Given the other substantial changes to the UK apprenticeship system in the past decade and a half, more up to date UK impact evaluation evidence is also needed.

Lessons

  • Government is committed to further increasing the number of apprenticeships by 2020. This evidence review highlights the need for more impact evaluations on the economic case for apprenticeships as these are being rolled out.

  • Central government should set up evaluations of scheme design and its effect on take-up, completion and outcomes. This is particularly important given devolution of skills budgets to cities such as London and Manchester. Central and local policymakers should work together to design robust evaluation that increases our understanding of how to improve the design of apprenticeships.

  • Any policy should carefully consider how to recruit firms to provide apprenticeships, and trainees to fill them. A better understanding of the costs and benefits to firms will help in this, as will a better understanding of which policy design aspects increase take-up and reduce drop-out.

  • More research is required looking at outcomes for firms. Surveys of firms who offer apprenticeships suggest those firms see clear benefits, but they may not be representative of all employers.

  • While the evidence suggests that higher level apprenticeships (specifically, Level 3 and above) may offer better outcomes, it does not currently tell us whether this is because stronger candidates gravitate towards more demanding programmes. If this is the case, policymakers need to consider how to address the needs of those ‘left behind’ by this type of apprenticeship offering.

  • Policymakers should look to undertake systematic comparisons that cover different kinds of apprenticeship model - for example, the German system versus a more decentralised system.

Evidence Review Downloads

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