School-to-Work Programs in the United States : A Multi-Firm Case Study of Training, Benefits, and Costs

This paper provides one of the first detailed analyses of the training and finances of school-to-work (STW) programs in the United States. The data are from case studies of seven STW programs sponsored by firms of diverse size, type, and location. In almost every case, the firm paid at least some of the costs of general training. Most firms recoup some of these costs through rents captured by hiring former apprentices, but only in two cases do benefits seem likely to outweigh costs. These findings suggest that certain imperfections in American labor markets--for example, compensation that undershoots marginal products for some workers, and a gap between productivity and wages that sometimes increases with workers' skill levels--motivate firms to invest in general skills, but these labor market imperfections may not be great enough to allow firms to sustain STW programs over the long run