Supernovas, Sceptics, and Loyal VETerans: Swiss firms’ training considerations in dual vocational education and training
Type
conference contribution
Date Issued
2023
Author(s)
Abstract
In this paper, we address the concerns about the viability of a core pillar of coordinated market economies, in-firm vocational education and training (VET). With the emergence of the knowledge economy, technological advancements have changed labor market demands faster than institutions providing VET can adapt. This trend has aggravated shortages of workers with adequate skills across industries and created uncertainty about the longevity of skills, causing doubt among firms that training new workers might not return their investments. We draw on Hirschman’s Exit, Voice, and Loyalty theory to explain what type of firm chooses to opt out of, or to stay in VET. We argue that an interplay between Voice and Loyalty insulate firms from opt-out considerations, even in face of hiring difficulties. On the other hand, satisfaction with the system does not alone dissuade firms from considering opting out. Using novel and unique survey data from over 2’700 Swiss training firms, we identify the sector- and firm-level factors behind their opt-out considerations. We find that in high- and low skilled sectors opt-out considerations are more common than in traditional mid-skilled sectors. Regarding the firm level, we show that the institutional embeddedness and internal strategies play a major role as well. To link the two levels, we propose a framework that allows us to sort firms into four categories along sectoral groups, indicating where risk for opting out is highest.