Can apprenticeships boost Millennial job prospects? Obama thinks so.

When was the last time Millennials heard talk of apprenticeships?

It may have been Grandpa’s reminiscence about life back in trade school.

But if you’re a policy nerd, it may have been just this week, when the Obama administration unveiled its FY2017 budget proposal. Tucked deep in the 182-page document is a $2 billion increase in apprenticeship programs, with $200 million designated for youth apprenticeships.

Combine an explosive election year with a lame-duck presidency, and you see why the proposal has as much chance of passing as Obama, Paul Ryan, and Mitch McConnell having a boys’ night out.

Nonetheless, the conversation’s now come off the backburner – and for good reason: two-thirds of millennials actually don’t complete a traditional 4-year college degree. And even among those who do, over one in five are unemployed or underemployed. A fresh economic approach is needed.  Apprenticeship could play an important part.

Though today, apprentices make up only 0.2 percent of the US labor force. Compare that to almost 4 percent in Austria and Germany, the poster children for apprenticeships. In the UK, where they make up about 2 percent, Prime Minister Cameron has promoted apprenticeships as his solution to youth unemployment. He’s called for the creation of three million of these partnerships by 2020. 

And how can you blame him?

Apprenticeship is an idea that holds deep appeal. Young people pursue coordinated classroom and on-the-job training in skills that employers need; they earn a wage while doing so; and at the end – if they’ve performed well – they’re assured of a well-paying job. It’s a win-win picture for both the trainee and the employer.

So I was surprised to discover just how thin our evidence base for the benefits of apprenticeship really is. Even a recent pro-apprenticeship policy brief from a centrist research group states, “…no rigorous evidence is available about apprenticeship’s cost and benefits to U.S. employers…”

Having found so little evidence on the American side, I decided to look overseas. Fortunately, just last September a government-sponsored initiative by the British government looked at over 1,000 studies about apprenticeships in economically developed countries. Findings from the 27 studies that met the Centre’s evidence standards included: 

• Generally positive impacts on participants’ wages and subsequent employment;
• The finding that higher-level apprenticeships deliver “substantially higher” lifetime wage gains relative to lower-level apprenticeships; and
• “Some evidence” that employers participating in apprenticeships realize economic benefits, “but more impact evaluations are needed.”

In the face of this disappointing lack of evidence, what should we do, especially if you’re someone, like myself, who believes that apprenticeship programs remain an intuitively promising approach to creating pathways to well-paying jobs for millennials?

We should be suitably humble in the face of our lack of knowledge and experiment and learn as we go. Policymakers who initiate and expand such programs should simultaneously set aside funding to collect better evidence on these programs so they can continue to be evaluated and improved upon. Additionally, since apprenticeships tend to be very popular and are likely to be oversubscribed at any plausible funding level, serious consideration should be given to requiring that available slots in any particular locality should be assigned by lottery, if the number of eligible participants exceeds the number of slots.  Not only is this fair, it will also make it much easier for us to establish the true impact and return on investment of the programs and thereby improve them.

This campaign season has shown that many millennials downright dismiss establishment politicians and business as usual. For those looking to upend the status quo – both economically and educationally – then apprenticeships should be part of the solution.

Monica Herk is Vice President of Education Research at the Committee for Economic Development.