Firm retention and productivity of apprentices

This study investigates the retention rate of young people in firms that offer apprenticeship positions. While the majority of training firms hire apprentices with the aim of retaining them when the contract ends, only a small proportion of youths actually transition into full-time employment in the same firm. To explain this phenomenon, I rely on a tractable model that incorporates firm decision-making processes, enabling an analysis of the retention rate. By estimating the productivity distribution of apprentices based on observed wage data from French surveys, the findings indicate that training firms, on average, benefit more from separating from apprentices rather than hiring them as workers.