Personnel policy adjustments when apprentice positions are unfilled: Evidence from German establishment data

German firms have increasing difficulties in filling apprentice positions. I study how firms adjust their personnel policies when they face unfilled apprentice positions. Using the IAB Establishment Panel (2008-2014) and applying fixed effects panel estimations, I find that small firms react by hiring more unskilled workers. I do not observe an intensified use of personnel policies directed at the existing workforce, such as further training, retention of apprenticeship graduates or conversion of fixed-term into permanent contracts. Moreover, the results do not indicate that firms with unfilled apprentice positions turn away from apprenticeship training. My findings suggest that most training firms may not regard unfilled apprentice positions as a serious problem (so far).