Being on A Traineeship

There are two sources for this headline value the report “Estimating the impact of Traineeships” by Department for Education and the report “The Value of Training” by Learning Curve Group.

The following calculation is based on the report “Estimating the impact of Traineeships” by the Department for Education.

The effects in the report are based on analysis of national administrative data and ‘estimates the effect of participating in a Traineeship on the three intended outcomes of progress into an apprenticeship, further learning or employment’.

The report focuses on a 2013/14 cohort of Trainees.

The report reveals that undertaking a Traineeship increased the likelihood of a young person both being in an apprenticeship or being employed port reveals that undertaking a Traineeship increased the likelihood of a young person both being in an apprenticeship or being employed within 12 months of finishing the traineeship with around 75% of trainees moving in a positive employment or education direction.

***=difference statistically significant at the 1 per cent level

Young people aged 16–18 who completed a Traineeship were 24.8 % more likely to be in an apprenticeship after 12 months than similar peers who did not take part. This is a very strong, statistically significant effect. This study didn’t find any statis tically significant relationship between traineeship and employment for 16–18-year-olds.

The economic value of the traineeship is calculated based on the probability of being employed or in apprenticeship after the traineeship for 12 months. We assumed that their employment or apprenticeship will continue for a year.

Methods used:

In the report they use:

Propensity Score Matching (PSM) as well as Instrumental Variables Analysis (IV)

Age 19–23

Let’s use the incremental probabilities due to the Traineeship:

• 9% in apprenticeship → £20,000 per person per year for Level 2 apprenticeship in 2023 prices.
• (18.6% – 10.9%) = 7.7% in employment but not in apprenticeship → £23,000 is the low paid employee jobs per person per year for full-time employment.

To avoid double counting the salary effect, we must subtract the apprenticeship impact from the employment impact if we want to isolate non-apprenticeship employment. Because in UK education and labour market statistics, apprenticeships are counted as a form of employment.

• The rest (100% – 18.6%) → assumed to have no change from baseline (therefore we ignore them for impact calculation)

Marginal Expected Salary Increase:

=(0.109×20,000)+(0.077×23,000)=2,180+1,771=£3,951 rounded to £4,000

So, the average earnings gain due to the Traineeship for a 19–23 year old is £4,000 per year in 2023 prices.

Age 16–18

Since only the apprenticeship outcome is statistically significant:

• 8% more likely to be in apprenticeship than comparison group.
• Employment effect is not significant, so we don’t include it. =0.248×20,000=£4,960 rounded to £5,000

The marginal expected salary gain attributable to the Traineeship for 16–18 year olds is £5,000 in 2023 prices.

An average for the whole age range (16-23) could give a value of (£4,000+£5,000)/2 = £4,500.

Another source for the economic impact of training is the report “The Value of Training” by Learning Curve Group.

Their survey results indicates that around 2,000 people who undertook Learning Curve Group training while unemployed were able to find work within six months of completing their course. The independent body estimates that this resulted in improved earnings prospects for these individuals amounting to a £32 – £50 million annual wage gain, or between £16,000 and £25,000 per trainee. This estimate range is produced using the average wages per occupation type reported in the survey by Learning Curve Group trainees, and the average wages per occupation type as published in the Annual Survey of Hours and Earnings, 2021, to reflect the potential range of wages now earned by these trainees.