New research into the different earnings returns of younger and older apprentices was presented by Professor Steven McIntosh from the Department of Economics to policy experts in London on 24 September 2018.
This new research evidence shows that apprenticeships in England remain of high value on average to young people, particularly in the 19-24 age group, with high earnings returns for those completing apprenticeships in sectors such as Construction, Engineering and Manufacturing, as well as in Accountancy, IT, Logistics and Travel and Tourism.
Apprenticeships taken by the increasingly large numbers of apprentices aged 25+ are on average of lower value, though there is still a positive benefit on the earnings of these people.
Young people aged between 19-24 when they completed an apprenticeship experience an average of between 12-22% additional growth in their earnings. Apprentices aged 25 and over experienced a 6-8% average earnings increase.
The number of apprentices more than doubled between 2007 and 2017 from below 200,000 a year to around 500,000 a year and most of the increase has been amongst people aged 25 and over.
Prof Steven McIntosh
Department of Economics
For most groups, the reason for the lower average earnings differentials for older apprentices is due to them completing an apprenticeship of lower value than that undertaken by younger apprentices within the same sector. This was particularly the case in non-manual service sectors such as Business Administration, Accountancy and IT.
The new research was presented at a workshop chaired by Professor Baroness Alison Wolf to policy experts from the Department for Education, Institute for Apprenticeships, HM Treasury and the Association of Colleges the Resolution Foundation and the Gatsby Foundation at the National Institute for Economic and Social Research in London.
This latest research shows that the age of apprentices should be considered by policymakers in this area. The government sees better returns on the funding of under 25 apprentices than those over 25 and the focus of the apprenticeship should be on developing new skills rather than updating existing skills.