Unpacking the Returns to Apprenticeships: Evidence from Canada

The Institute for Research on Poverty hosts seminars on the UW-Madison campus most Thursdays during the academic year. These presentations are free and open to the public. Room 8417.

media release: Speaker: Fernando Saltiel, associate professor, Department of Economics, McGill University

We estimate the returns to completing an apprenticeship in Canada using administrative data linking apprenticeship records to tax files between 2008 and 2022. Using a two-step matching estimator in a generalized difference-in-differences design, we find that the returns to completion exceed $12,000, amounting to 20% of baseline earnings. These returns persist through nine years following completion, and are robust across various specifications. Estimated returns vary substantially across trades, ranging from large returns in construction and technical fields to negative returns in some service-based programs. To understand what drives returns to completion, we introduced a modified Gelbach decomposition, which showed that unionization and industry mobility explain part of the returns. Results suggest that apprenticeships primarily deliver general human capital rather than occupation-specific skills.