DOL Study Finds Substantially Higher Earnings for those Who Participate in Registered Apprenticeship –Up to $240,037 over Lifetime

Posted by Alexander Jordan - On August 07, 2012 (EST)


Individuals who complete a Registered Apprenticeship program will earn substantially higher wages over their lifetime according to a study released today by the U.S. Department of Labor.  The study, An Effectiveness Assessment and Cost-Benefit Analysis of Registered Apprenticeship in 10 States, found that over a career of 36 years, participants who completed the Registered Apprenticeship program had average earnings gains of nearly a quarter million dollars ($240,037, increasing to $301,533 with employer benefits added) compared to nonparticipants.  After accounting for costs such as taxes, the net benefits for those who complete a Registered Apprenticeship program are $233,828.  Even when individuals who participated in but did not complete Registered Apprenticeship are added to the analysis, the estimated average earnings gains for all participants is still an impressive $98,718 ($123,906 with employer benefits) over their careers.  Taking into account various costs the estimated net benefits for all RA participants are $96,911. 

Registered Apprenticeship is a career-training program that offers structured on-the-job training combined with related technical instruction tailored to industry needs.  The program, created in 1937, seeks to produce well-trained workers whose skills are in high demand.  In 2011, almost 400,000 people across the nation were enrolled in the program.  Registered Apprenticeship is administered by the Employment and Training Administration’s Office of Apprenticeship within the U.S. Department of Labor, in conjunction with State Apprenticeship Agencies.  Apprenticeship programs range from one to six years and are offered in approximately 1,000 occupations, including the traditional skilled trades such as electrician, plumber, and carpenter, as well as occupations including wind turbine technician, health informatician and geothermal & well-drilling operator.  For apprentices, RA provides on-the-job training, related technical instruction, incremental wage increases as skills are attained, and, upon completion, nationally recognized certification in the chosen career area.  RA programs are delivered by sponsors—employers, employer associations, and labor management organizations.  Sponsors cover the costs of training, wages paid to apprentices, costs of managing the program, and costs associated with time spent by senior employees to mentor and train apprentices.

This study, led by principle investigator Debbie Reed of Mathematica Policy Research, Inc., assesses the effectiveness of Registered Apprenticeship and performs a cost-benefit analysis of the program.  The report measures the net effects of apprenticeship for participants as well as the social costs and benefits of Registered Apprenticeship across a variety of state settings.  It also examines the barriers that women face in Registered Apprenticeship and the best practices for promoting their success.  In addition, the report explores whether federal and state administered RA programs have patterns of differences in the programs themselves and their outcomes.  

The study focused on 10 states selected to vary in program features and labor market characteristics, including program size, region, the degree of union representation in the state, administrative type (federal or state), and the degree to which RA is concentrated in a few occupations.  The states are Florida, Georgia, Iowa, Kentucky, Maryland, Missouri, New Jersey, Ohio, Pennsylvania, and Texas.


Key Research Findings
  • RA participants had substantially higher earnings than did nonparticipants.  Over their career of 36 years, participants who completed the RA program had average earnings of nearly a quarter million dollars ($240,037, increasing to $301,533 with employer benefits added).  After accounting for costs, the net benefits for RA completers are $233,828.  Even when non-completers are added to the analysis, the estimated average earning gains for all participants is still an impressive $98,718 ($123,906 with employer benefits) over their careers.  Taking into account various costs such as taxes, apprentices pay on earnings gains, the estimated net benefits for RA participants are $96,911. 
  • The social benefits of the RA program appear to be much larger than the social costs.  Over the career of an apprentice, the estimated social benefits of RA exceed the social costs by more than $49,000.
  • The report finds that female apprentices expressed positive views of RA but recommends some changes to promote women’s success.  The data demonstrates that women participate in RA at lower rates than men and are concentrated in social service occupations (mainly child care and health care).  In the 2010 cohort, women made up only 9 percent of new apprentices.  Women are much less likely than men to enroll in the traditional skilled trades and, when they do, they are less likely than men to complete RA.  The women interviewed see their participation in RA as a pathway to career advancement and higher pay.  Those interviewed suggested strategies to enhance the success of women in RA: undertaking targeted outreach campaigns, building women’s basic skills, helping women develop accurate expectations about particular occupations, adequate child care, assisting employers to enforce policies to combat harassment at male-dominated worksites, and peer groups for support and encouragement. 
  • RA programs are largely similar in states federally administered by the OA states and SAA states.  Modest differences were found between OA and SAA states in terms of the demographics, occupational distribution, completion rates, and earnings gains of apprentices. The most notable difference was that SAA states are more easily able to create partnerships with the workforce system and educational institutions because they are part of the same state government.


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Modified On : August 07, 2012
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