Association for Public Policy Analysis & Management

The low rate of apprenticeship in the United States is an outlier among most advanced countries.  It is common knowledge that apprenticeships are widespread in Austria, Germany and Switzerland.  However, many do not realize that apprenticeships are common in many other countries and have increased sharply in Australia and England.  For the U.S. to reach the average apprenticeship rate (apprentices as a share of the labor force) of Australia, Canada and England would require four million apprentices, or about 10 times the current number.

This paper first examines past and current efforts by the federal and state governments to stimulate apprenticeship.  It begins with a review of budgets of the Office of Apprenticeship within the U.S. Department of Labor as well as state contributions to apprenticeships.  It considers how these and related outlays for apprenticeship compare with other training programs and with apprenticeships in other countries.  It looks at subsidies for schooling and for other costs of apprenticeship. Finally, it draws on existing literature to compare cost-effectiveness of expenditures of apprenticeship with other investments in human capital.

The second part of the paper describes, classifies, and assesses recent initiatives to promote apprenticeships, mainly through discretionary grant programs.  The focus is on grantees receiving funding through the $100 million American Apprenticeship initiative, but also covered will be funding that emerged from the Trade Adjustment Assistance Community College (TAACC) grants.  The section begins with a description and classification of the projects with respect to occupational coverage, target group, methods for recruiting employers and potential apprenticeships, funding, expected uses of funds, and expected increase in apprenticeship training. 

The third section assesses the grants, partly prospectively.  It develops a prospective cost-benefit analysis—what would be the social return to the federal apprenticeship investments assuming that the sponsors meet the goals promised in their proposals?  How do the returns vary across type of program?  How do the projected returns vary by type of occupation? 

The paper concludes with a section on the potential of the grant projects to lead to major expansions of apprenticeship, and meeting and/or going beyond (or falling short) of President Obama’s goal of doubling the number of registered apprenticeships in five years. It presents recommendations for reaching high levels of apprenticeship in the U.S., their likely cost, and their likely impacts.