What Are the Costs of Generating Apprenticeships? Findings from the American Apprenticeship Initiative (AAI) Evaluation (Issue Brief)
ETA launched the American Apprenticeship Initiative (AAI) in October 2015 and provided five-year grants to 46 grantees to expand registered apprenticeship into new sectors and to populations historically underrepresented in apprenticeships. Some AAI grantees received no-cost extensions of their periods of performance through September 2021. In April 2016, ETA commissioned an evaluation of the AAI to build evidence about the effectiveness of registered apprenticeship for apprentices and employers. The evaluation included four sub-studies (an implementation study, an outcomes study, an employer return-on-investment (ROI) study, and an assessment of a demonstration to encourage employers to adopt apprenticeship). Three reports comprised the implementation sub-study. In addition to the sub-study reports, the AAI Evaluation included five topical issue briefs.
This brief examines the costs to AAI grantees, along with the number of apprenticeships they helped create, to derive the government cost per added apprentice. The key data source for the analysis is the Department of Labor’s Apprenticeship Quarterly Performance Reports, or Apprenticeship QPR, supplemented with information from the AAI Grantee Survey to understand how the costs of apprenticeship expansion vary with grantee characteristics. By the last quarter of the AAI grants (ending September 2021), average cost per apprentice for all grantees declined to $5,171; for the median grantee, the figure was $6,407 per apprentice. The median AAI grantee with prior experience spent about $4,867, far less than the $8,702 per apprentice spent by the median AAI grantee with no apprenticeship experience. Ultimately, the costs per apprentice of individual grantees are lower as AAI grantees generate more apprenticeships. The implications of this research are that funding grantees based on the targets they propose is likely to yield a wide variation in the cost per added apprentice and paying only for the apprenticeships generated could increase the number of apprenticeships for a given budget.