Net Value of Apprentice Work
RCTReview
Informal enterprise owners may underpay apprentices relative to their productive output to compensate for on-the-job instruction and supervision costs. Determining whether apprentices pay for their training requires measuring the wedge between their gross work value and total monetary compensation.
Picture this
Think of an assistant baker who bakes $100 worth of bread every day but is only paid $30 in pocket money. The $70 difference is the extra value the bakery owner keeps to cover the cost of showing the assistant how to bake and supervising their work.
What the evidence says
Host enterprise net value of work performed by apprentices increased by 21,380 FCFA per month (p = 0.0003), more than doubling the control group mean of 19,230 FCFA per month, while firm wage bills did not significantly rise (+4,391 FCFA, p = 0.177).
- Who was studied
- N = 674 informal micro and small enterprise owners evaluated at midline across 7 urban localities in Côte d'Ivoire.
- How
- Enterprise-level aggregation comparing replaced casual worker cost (gross work value) against total wage/allowance bill across all newly entered apprentices.
What to do
Compute the net value of trainee work by subtracting total employer compensation from the estimated market cost of hiring casual labor for identical tasks.
From the source
"Observing a positive impact is highly suggestive that apprentices are paid below their productivity... This increase amounts to 21 380 FCFA per month, more than doubling the net value of work performed by apprentices in control firms."
Direct_and_Indirect_Effects_of_Subsidized_Dual_Apprenticeships.pdf