Workers' Compensation Rates and the Demand for Apprentices and Non-Apprentices in Victoria

The aim of this paper is to provide a detailed quantitative analysis of the impact of changes in the current cost structure on the employment of apprentices and non-apprentices in Victoria. In particular, we emphasise the impact of "large" changes to the cost structure, such as waiving or changing the workers' compensation payments for all apprentices throughout their period of training; as well as "small" or "marginal" changes, such as waiving the workers' compensation payment for first-year indentures only. We find that "large" changes to the cost structure affect employment only in the metal and electrical trades. In these two trades the effect on the employment of apprentices is less than proportional to the change in the subsidy rate. Further, we find that "marginal" adjustments to workers' compensation, payroll tax and training subsidies have a negligible effect on apprentice employment. Overall, our results are not uniform across the various trades, which suggests that there are inter-skill differences. Thus, if intervention in the apprentice labour market is to have any significant impact on employment, it must be targetted to specific trades.

Issue Date:
Jan 01 1988
Publication Type:
Working or Discussion Paper
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 Record created 2017-09-08, last modified 2020-10-28

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