Can Financial Incentives to Firms Improve Apprenticeship Training? Experimental Evidence from Ghana
American Economic Review: Insights
vol. 6,
no. 1, March 2024
(pp. 120-36)
Abstract
We use a field experiment to test whether financial incentives can improve the quality of apprenticeship training. Trainers (firm owners) in the treatment group participated in a tournament incentive scheme where they received a payment based on their apprentices' rank-order performance on a skills assessment. Trainers in the control group received a fixed payment based on their apprentices' participation in the assessment. Performance on the assessment was higher in the treatment group. Two years later, treated apprentices scored 0.15σ higher on a low-stakes oral skills test and earned 24 percent more in total earnings, driven by higher self-employment profits.Citation
Brown, Gabriel, Morgan Hardy, Isaac Mbiti, Jamie McCasland, and Isabelle Salcher. 2024. "Can Financial Incentives to Firms Improve Apprenticeship Training? Experimental Evidence from Ghana." American Economic Review: Insights, 6 (1): 120-36. DOI: 10.1257/aeri.20220696Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- D82 Asymmetric and Private Information; Mechanism Design
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- M53 Personnel Economics: Training
- O12 Microeconomic Analyses of Economic Development