Can Financial Incentives to Firms Improve Apprenticeship Training? Experimental Evidence from Ghana

Abstract

We use a field experiment to test whether financial incentives can improve the quality of apprenticeship training. Trainers (firm owners) in the treatment group participated in a tournament incentive scheme where they received a payment based on their apprentices’ rank-order performance on a skills assessment. Trainers in the control group received a fixed payment based on their apprentices’ participation in the assessment. Performance on the assessment was higher in the treatment group. Two years later, treated apprentices scored 0.15σ higher on a low-stakes oral skills test and earned 24 percent more in total earnings, driven by higher self-employment profits. (JEL D22, D82, J24, J31, M53, O12)