Absence of conflict of interest.
Citation
Highlights
- The study's objective was to examine the characteristics of apprenticeship programs and apprentices in Illinois, their annual and long-run economic impacts, and the similarities and differences between construction apprenticeships and other levels of educational attainment.
- Using government data on apprenticeships, the authors employed statistical models to evaluate the economic effects of construction apprenticeship programs and compare registered apprenticeship programs to other educational attainment levels.
- The study found that most active apprentices in Illinois participated in joint labor-management programs and the construction industry. Construction apprenticeships in Illinois contributed to job creation or retention, GDP growth, increased tax revenue, and positive return on investment both annually and long-term. These programs also ranked 16th in enrollment among the largest universities in the state, surpassing various educational levels in average long-term income gain.
- To examine the economic effects of construction apprenticeships, the authors imputed missing data because the Form 990 reports only had information for 9,346 out of 10,811 active construction apprentices in Illinois.
Intervention Examined
Registered Apprenticeships
Features of the Intervention
Registered Apprenticeship programs involve structured, on-the-job training and classroom instruction to help individuals gain the skills, knowledge, and experience needed to pursue their desired occupation and meet the needs of employers. Funded often by private entities and sponsored by employers, joint labor-management programs, and unions, the programs allow apprentices to "earn while they learn" with very little to no cost to them to participate. The study examined active apprenticeship programs across Illinois that comprise a variety of industries, with a majority of programs in construction, and have specific requirements for program completion.
Features of the Study
The study analyzed government datasets with apprenticeship data on active apprentices in over 500 programs in Illinois, providing descriptive statistics on apprentices and apprenticeship programs. The authors collected data from a Freedom of Information Act Request (FOIA) from the U.S. Department of Labor for fiscal year (FY) 2015, Form 990 reports submitted to the Internal Revenue Service (IRS) for 2016, the 2014 American Community Survey, and additional apprenticeship data from U.S. Department of Labor Employment and Training Administration and the 2012 Economic Census of Construction. The study uses three samples to address its research questions. To examine the characteristics of apprentices and programs, it looks at 12,123 active Illinois apprentices from the FY 2015 FOIA. For the economic impacts of apprenticeship programs, it analyzes data on 10,811 construction apprentices from Form 990 reports. Finally, to compare with other educational levels, it uses data on 630,344 Illinois residents from the 2014 American Community Survey. The authors used statistical models to estimate the economic effects of construction apprenticeship programs and to evaluate the personal outcomes of registered apprenticeship programs in comparison to other educational attainment levels.
Findings
Overview of registered apprenticeship programs in Illinois:
- The study found that the number of apprenticeship programs declined in Illinois, from its peak of 561 programs in FY 2012 to 511 programs in FY 2015.
- The number of active apprentices in Illinois fluctuated over the years: 11,906 in FY 2011, 15,400 in FY 2012, 13,643 in FY 2013, 10,380 in FY 2014, and 12,123 in FY 2015.
- Of the 12,123 apprentices in FY 2015, 30.8% were White men and 69.7% were women and people of color.
- Most active apprentices (89.2%) were in construction programs, while 10.8% were in non-construction programs. Among the 10,811 construction apprentices, 98.5% joined joint labor-management programs, with the rest in non-joint programs.
- In FY 2015, joint labor-management programs generated 99.5% of annual training revenues for construction workers, totaling about $155.1 million. They spent $135.4 million on apprenticeship training, resulting in a surplus of $19.8 million. Joint programs earned approximately $14,570 per apprentice, compared to $5,154 for non-joint programs.
Estimates of apprenticeship programs' annual and long-term economic effects:
- The study revealed that in 2016, apprenticeships in the construction industry directly created or preserved 2,675 jobs, indirectly led to 929 more jobs in local industries, and caused an additional 1,355 jobs due to consumer demand.
- In 2016, Illinois experienced a GDP growth of $408.7 million, driven by registered apprenticeships in the construction sector, with $184.2 million directly attributable to these apprenticeship programs. State and local tax revenues, including personal income, household sales, property, corporate, and other taxes, rose by $28.6 million due to construction apprenticeship programs.
- Over time, apprenticeship programs in construction contributed an additional $1.25 billion to Illinois' GDP. These programs also lead to an increase of $101.4 million in federal tax revenues and $98.7 million in state and local tax revenues.
- Additionally, construction apprenticeship programs in Illinois lead to a long-term reduction in unemployment insurance costs by $27.1 million, a decrease in food stamps expenditures by $17.7 million, and a drop in welfare expenses by $5.5 million.
- Each year, the return on investment for every cohort of apprentices is $3 for each dollar invested in private training over one year. Over time, this increases to $9.14 per dollar spent on training, with the ROI rising to $10.98 when considering government revenue and savings.
Comparison of construction apprenticeships with other levels of educational attainment:
- In 2015, Illinois construction apprenticeship programs were 16th among the state's top 20 universities in terms of enrollment, with 10,811 apprentices and the lowest tuition cost of $0. From 2010 to 2014, these registered apprenticeships also ranked 16th for average income increase over 36 years, reaching $119,850 after accounting for average debt.
- The International Union of Operating Engineers Local 150 offers apprenticeship programs for Operating Engineers that require at least 6,432 hours of training over four years. Out of this, at least 6,000 hours must be spent on-the-job. For heavy equipment technicians, the program demands even more: 8,000 hours of on-the-job training and 864 hours in the classroom over five years. This is different from a bachelor's degree at the University of Illinois at Urbana-Champaign, which requires 5,760 hours of classroom instruction.
Considerations for Interpreting the Findings
The Form 990 reports submitted to the IRS included information on 9,346 out of 10,811 active apprentices in the construction industry. Data for the remaining apprentices were either difficult to find or unavailable. The authors presumed that programs with missing data resembled those with complete data and imputed the missing data to generate estimates for the entire state of Illinois.