Subsidized Dual Apprenticeships Sharply Lift Youth Earnings With Minimal Crowd-Out

California is pouring money into dual-track HVAC apprenticeships right now — classroom instruction paired with paid on-the-job training. A new randomized controlled trial in the Review of Economic Studies (2025) gives that model real empirical backing.

The study ran a two-sided experiment: one treatment arm provided structured vocational instruction on top of on-the-job training, the other added a wage subsidy to lift apprenticeship take-up. The combined package substantially raised both enrollment and post-program earnings for participants. Equally important, it barely displaced existing informal apprentices, which was the main worry going in.

One caveat deserves to be stated clearly: the study was conducted in Côte d'Ivoire. The institutional context is different from a California HVAC program. But the research design — randomized, peer-reviewed, published in one of the top-five economics journals — is as rigorous as it gets, and the core mechanism (pair training with jobsite experience and a wage subsidy, and you get durable earnings gains without cannibalizing the informal pathway) is exactly what California workforce agencies are betting on.

What the Data Actually Shows

Participants in the combined training-plus-subsidy arm saw post-program earnings rise by a meaningful and statistically significant margin versus the control group. Take-up jumped because the subsidy reduced the opportunity cost of training time. Displacement of existing informal apprentices came in near zero, which contradicts a common criticism that formal apprenticeship programs just shuffle workers from one track to another.

Said differently, this wasn't a zero-sum pie. The subsidy pulled new people into the trade and trained them effectively.

For HVAC owners training apprentices through California's DAS-registered programs, that data matters. The state is expanding classroom-plus-jobsite models under the Golden State Pathways and Career Technical Education Incentive Grant programs. Shops participating as employer partners now have peer-reviewed evidence they can point to when a district or workforce board asks whether the model works.

What This Doesn't Fix

The study doesn't tell you how to run a training bench or how to price apprentice billable hours. It tells you that the structural approach — classroom plus jobsite plus subsidy — produces real earnings gains for participants and doesn't cannibalize existing pathways. Implementation still matters.

The wage subsidy piece is the part American programs still get wrong. California's DAS apprenticeship standards require paid on-the-job training, but the hourly rate during first-year apprenticeship is low enough that many candidates can't afford to take it instead of a warehouse job. The Côte d'Ivoire study found that topping up the apprentice wage during training dramatically lifted take-up. Federal Job Corps and state Workforce Innovation and Opportunity Act programs can fund similar top-ups, but they're underused in HVAC.

Shops that learn the funding stack — DAS registration, WIOA voucher integration, CTE grant partnerships — can effectively run apprentices at near-zero net cost for the first year while building a pipeline of loyal techs. The research suggests those techs stick, earn well, and don't come at the expense of your existing helpers moving up.

That's the argument worth making at the next industry association meeting.

For more on the trade's workforce picture, see our technician workforce shortage coverage and the California compensation survey.

Source

Crépon, Bruno and Patrick Premand (2025). "Direct and Indirect Effects of Subsidized Dual Apprenticeships." Review of Economic Studies, Vol. 92, No. 5, pp. 2979–3028. https://academic.oup.com/restud/article/92/5/2979/7745146