Unwilling to Train? Firm Responses to the Colombian Apprenticeship Regulation*

Open Access       

Authors: Santiago Caicedo, Miguel Espinosa and Arthur Seibold

Econometrica, Vol. 90, No 2, 507-550, March, 2022

We study rm responses to a large-scale change in apprenticeship regulation in Colombia. The reform requires rms to train, setting apprentice quotas that vary discontinuously in rm size. We document strong heterogeneity in responses across sectors, where rms in sectors with high skill requirements tend to avoid training apprentices, while rms in low-skill sectors seek apprentices. Guided by these reduced-form ndings, we structurally estimate rms' training costs. Especially in high-skill sectors, many rms face large training costs, limiting their willingness to train apprentices. Yet, we nd substantial overall bene ts of expanding apprenticeship training, in particular when the supply of trained workers increases in general equilibrium. Finally, we show that counterfactual policies taking into account heterogeneity across sectors can deliver similar bene ts from training while inducing less distortions in the rm-size distribution and in the allocation of resources across sectors.

This paper originally appeared as Barcelona School of Economics Working Paper 1204