Supply-side and demand-side explanations of declining apprentice training rates : a critical overview

Over the last decade numerous academic, industry and government studies have suggested that Australia has experienced a sustained decline in apprentice training rates and that this is contributing to shortages in core vocational occupations. This article redresses significant deficiencies in these studies by providing new data on long-run apprentice training rates by broad occupational group. This data confirms the existence of a sustained break in the long-run apprentice training rate from the early 1990s to the present. The article also provides an overview and critical assessment of the key explanations of this decline and policy recommendations to redress the decline. It is argued that these explanations may be classified into supply-side and demand-side approaches. The article concludes firstly, that, in general, demand-side explanations provide a superior understanding of declining training rates. Secondly, given the potential importance of trade skill shortages additional research is required both to quantify the effect of the various demand-side contributions to reduced training rates and to reorient current policies to better address these demand-side causes.