The Effectiveness of the Traineeship Model. Occasional Paper

Over 20 years ago, during a period of high youth unemployment, Peter Kirby recommended that a system of traineeships be adopted for disadvantaged 16- and 17-year-olds. Growth in traineeships was initially slow until the mid-1990s, when rapid growth followed a series of reforms to traineeships. The reforms included the introduction of employer incentives and the widening of traineeships to existing workers, part-time workers, and older workers. This paper builds on work commissioned by the Victorian Interdepartmental Policy Unit on Youth Transitions into the effectiveness of traineeships for the youth cohort. Findings suggest that traineeships are an important pathway for female early school leavers. However, if the target group for traineeships is disadvantaged young people, then they are poorly targeted. The employment outcomes from traineeships are good, particularly for young early school leavers, but they find little evidence that traineeships have had a significant impact on skills acquisition. Overall, the authors conclude that the traineeship model is a good one, as the mixture of formal education and experience in the workplace is educationally very attractive. Their suggestions for improvement relate to better targeting of government support. In particular, they suggest that government support be targeted towards disadvantaged job seekers, such as early school leavers. Appendices include: (1) Consultations methodology; (2) Detailed history of policies relating to the traineeship system; (3) Illustrative case studies of wage costs and implicit wage subsidies; (4) Most popular training packages for Australia; and (5) Further study. (Contains 12 footnotes, 4 boxes, 24 tables, and 5 figures.)