Benefits and Costs of Healthcare and Information Technology Apprenticeships: Evidence from Two Federal Grant Programs

• In Event: New Evidence on the Implementation and Impact of Apprenticeship Programs

Abstract

This cost-benefit study analyzes the “net social benefit” of apprenticeship programs funded by the Scaling Apprenticeship through Sector-Based Strategies (Scaling Apprenticeship) and Apprenticeships: Closing the Skills Gap (Closing the Skills Gap) grant programs. Cost-effectiveness analysis is a method for understanding what models of apprenticeship expansion make the most efficient use of federal funds. Between these two grant programs, DOL awarded almost $284 million to 51 grantees. This study focuses on 24 grantees, 37 registered programs, and thousands of apprentices associated with healthcare and information technology occupations. The purpose of this study is to estimate the “net social benefit" of apprenticeship programs in healthcare and information technology (IT) occupations. The net social benefit is equal to the total monetized benefits of apprenticeship for all stakeholders, minus the costs of apprenticeship for the same group of stakeholders. This study also addresses costs and benefits for IT and healthcare apprenticeship stakeholders, what the net benefits of IT and healthcare apprenticeships for employers, and what the net social benefit of IT and healthcare apprenticeships are.

The study estimates the per-apprentice cost of IT apprenticeship for society as a whole to be $164,573 in real-world dollars (before making the adjustments required for calculating a net social benefit). The per-apprentice cost of healthcare apprenticeships is $55,203.· Most of these costs (94 percent for IT apprentices and 91 percent for healthcare apprentices), are apprentice compensation costs, paid by employers, which include both wage and non-wage benefits.· Per-apprentice benefits of apprenticeship for society as a whole are $199,195 for IT apprentices and $374,457 for healthcare apprentices.· For employers of IT apprentices, the median net benefits of apprenticeship range between $20,101 and $24,025 when the data are not weighted by the size of the apprenticeship program and -$19,318 and -$17,962 when the data are weighted.· In healthcare, median employer net benefits of apprenticeship range between -$12,451 and -$11,359 when the data are not weighted by the size of the apprenticeship program, and -$15,089 and -$14,029 when the data are weighted.· Net social benefits—taking employers’ net benefits as well as the costs and benefits of all stakeholders into account—are between $60,369 and $76,943 for IT and $206,022 and $263,899 for healthcare apprenticeships, indicating society as a whole experiences more benefits from apprenticeship than costs.

Author

• Daniel Peter Kuehn, Urban Institute
  Presenting Author