CVER's Chiara Cavaglia, Sandra McNally and Gu Ventura discuss the evolution of apprenticeships in England over the last 20 years.
The number of apprenticeship starts in England has reduced dramatically in recent years following government reforms and the COVID-19 pandemic. The composition has also shifted from almost complete domination by low and intermediate level apprenticeships to one where higher and degree apprenticeships constitute a significant share (26 per cent in 2020). Even though the number of apprenticeships has decreased, policy changes have likely improved their average quality. One might characterise the changes (at least up until the pandemic) as a substitution of quantity for quality. But this might have come at the cost of less equitable access with, for example, those living in disadvantaged neighbourhoods losing out from these changes.
Our report, ‘The recent evolution of apprenticeship participation and pathways’ documents these trends and assesses how they have affected different groups of people - by age group, socio-economic background, gender and ethnicity. We also look at the prior attainment of individuals undertaking different types of apprenticeship, the extent of progression and drop-out rates across apprenticeship types. Finally, we interpret what these patterns imply for broader concerns on the efficacy of the system and for social mobility. We study the change in apprenticeships between August 2014 and July 2020, using comprehensive national data (the Individual Learner Record). For younger age groups, we can link information to school records.
Changes in the number and composition of apprenticeships were strongly influenced by changes in government policy over these years, which included the overhaul of how apprenticeships are funded (with the introduction of the Apprenticeship Levy from 2017), the replacement of apprenticeship frameworks by employer-led standards, and new rules aimed at improving the quality of training (including a minimum duration, a minimum threshold for off-the-job training and a more rigorous final assessment). In line with these efforts, there has been a marked increase in the planned duration of apprenticeships. The net impact on productivity depends on whether the improvement in quality offsets the fall in numbers and the extent to which newer (more expensive) apprenticeships are displacing pre-existing forms of training (which is difficult to evaluate).
Changes in number and type of apprenticeships on offer appear to have had distributional implications. Whereas in 2015 apprenticeship starts were more frequently observed among people living in the most deprived fifth of neighbourhoods of England, by 2020 they were more evenly split across types of neighbourhood. This change is driven by bigger relative falls in lower-level apprenticeships (Levels 2 and 3) in more deprived neighbourhoods, particularly among older individuals. Young individuals from disadvantaged backgrounds are less and less represented at successively higher levels of apprenticeship. In fact, they are more likely to start a university degree than to study for a degree apprenticeship. Cast in this light, it is difficult to see such apprenticeships as being a route to improve social mobility.
Unlike in most other countries, apprenticeships in England are not predominantly used to facilitate the transition from school to work. Individuals over 25 years of age account for 40 per cent of all apprentices. Further, they account for the vast majority of those undertaking higher apprenticeships (at Levels 4 and 5) and over half of those undertaking degree apprenticeships. This matters because returns to apprenticeships are considerably higher for younger individuals (McIntosh and Morris, 2018). Women and ethnic minorities are under-represented among younger apprentices (up to age 25).
Another part of the story is that drop-out rates across apprenticeship types are relatively high. About 11 to 26 per cent of individuals drop out within one year (depending on the level of the apprenticeship and the age of the apprentice). The overall achievement rate varies between 60 and 70 per cent, which is lowest for older individuals (25+) on higher apprenticeships and highest for younger people on Level 3 apprenticeships. The fact that so many individuals fail to complete their apprenticeship is a cause for concern, especially given the high subsidy from the taxpayer.
Overall, our report points to improvements in the quality of apprenticeships on offer but fewer possibilities to access them because of their reduced number and more stringent academic requirements when offered at higher levels. Questions for policy makers include whether there ought to be more explicit targeting of firm-level incentives towards younger people and how opportunities may be made more widely available for those from disadvantaged backgrounds.