The effects of an apprenticeship program on wages and employability of youths in Brazil

The objective of this paper is to evaluate the Apprenticeship program (Lei do Aprendiz) that has been adopted in a large scale since 2000 in Brazil. This is a youth-targeted ALMP, which concedes payroll subsidies to firms that hire and train young workers under special temporary contracts aiming to help them to successfully complete the transition from school to work. We make use of a longitudinal matched employeeemployer dataset covering the universe of formally employed workers, including apprentices. Our identification strategy exploits a discontinuity by age in the eligibility to the Apprenticeship program. We examine the program impacts in terms of wage growth and attachment to the formal labor market using other temporary workers as a control group. We find that the program increases the chances of getting relatively better paid and more stable jobs, especially in the medium run – four and five years after the program.