What do the apprenticeship stats really tell us?

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Every year a new tranche of apprenticeships statistics is published, telling us often conflicting news about new starts and success rates. But do the figures merit a closer examination? Deborah Talbot unpacks a series of reports by CVER on apprenticeship trends and impacts.

A report by Sarah McNally for the Centre for Vocational Education Research (CVER), published in 2018, makes it clear we aren’t looking closely enough at what has changed in UK apprenticeships, nor their impact on employee outcomes.

Apprenticeship starts and successes

Popular discussion around apprenticeships has focused on starts, the impact of the Levy, the growth of higher apprenticeships and whether enough energy is going into Level 2.

However, McNally says: “it is easy to forget the overall context. There has been huge change in the number of apprenticeship starts since about 2008 (accelerating from 2010).”

That increase has been mainly the over 25s. This group were not represented in apprenticeships at all and now account for about half of all new starts. There has also been some growth among 19-24-year-olds. Only 16-18-year-old starts have remained static. 

The increase in new starts, McNally says, is mainly located in the Business, Administration and Law, Health, Public Services and Social Care, Retail and Commercial Enterprise, and Engineering and Manufacturing Technologies standards. There is some evidence to suggest that many or even most of the over 25 group were recruited from within firms.

A more in-depth analysis of success rates by Burnsall et al. (2017) show that achievements are potentially fewer than stated in official statistics. Their longitudinal study of apprenticeships started in 2011/12 revealed that one-third were withdrawn and a further 10% not completed within 36 months. They argue that official statistics tend to exclude withdrawn apprenticeships, giving a skewed figure of achievement rates.

“Assuming the same pattern persisted across the 2010-2015 Parliament,” they say, “the 2.4 million reported as starting an apprenticeship translates to between 1.5 and 1.7 million achievements.”

Obviously, this research is pre-Levy and standards reform. Nafilyan and Speckesser (2017) analysed the impact of the changes on 19-24-year-olds and concluded that the changes reduced apprenticeships starts in sectors by 13-33%, increased the drop-out rate by 3-5% and lowered achievement rates by 4-7%.

However, the reforms also increased earnings by 7%. Although it is difficult to gauge the causal relationship, the researchers argue this increase is due to improved job matching. And further, says McNally, “a reform to tighten apprenticeship standards may induce higher quality at the same time as causing a reduction in the number of apprenticeship starts.”

Apprenticeship wage outcomes

Longitudinal research conducted by Cavaglia et al. (2017), which tracked those starting an apprenticeship after finishing GCSEs in 2003, showed that undertaking an apprenticeship does lead to higher rewards.

Factoring in variables, such as ethnic and social disadvantage, the research found that the salary bump for completing an apprenticeship at Level 2 was 23% higher for men and 15% higher for women by the age of 28, compared to those who left school with CGSEs. Compared to those who achieved a Level 2 vocational qualification, the increase for apprentices was 16% for men and 4% for women.

Comparing salaries at Level 3, men who did an apprenticeship received 37% more in pay than those who left with A-Levels and 35% more than those who left with a Level 3 vocational qualification. For women, the figures are 9% and 15% respectively.

Evidently, there are large differentials between men and women in Level 2 and 3 apprenticeships outcomes. This differential is most likely explained, McNally argues, by sector entry. Men opt for apprenticeships in engineering and mechanics, where high salaries are found, whereas women tend to do apprenticeships in health, services and care. “Thus,” they argue, “much like university degrees, potential ‘returns’ to an apprenticeship vary across subject specialisms.” Regardless, it seems worthwhile to reflect on these gender differentials to assess possible policy interventions.

Does the wage bump occur for the over 25s, who are largely recruited from within workplaces? Apparently not. A follow-up report by Steven McIntosh and Damon Morris for CVER in 2018, which compares labour market outcomes for older versus younger apprentices, concludes that the wage rewards are greater for younger apprentices than for those over 25.

After reviewing a range of research on older apprentices, they argue this is mainly because older trainees are already working in the profession, so “training received by older apprentices is therefore more likely to be top-up training, rather than training to develop new skills for a new career.”

Why does the deep dive matter?

Firms are voting with their feet and seem largely interested in training their own staff through the Levy. The focus of their efforts tends to be older populations.

While retraining at all levels, and particularly at the higher level, has great knock-on effects for productivity, the impact on self-advancement and social mobility might be less for adults being trained or upskilled within their existing company.

That fact could imply the government should step in with funding to encourage more 16-18-year-olds apprentices or develop some alternatives for this group.

Policy often has unintended consequences. Expanding apprenticeships has a valuable impact on skills, productivity and personal outcomes. However, these reports show the need to delve further into the statistics, to make sure apprenticeships work hard for all groups and society.

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