LAB meeting, Germany

Similarities of German experts in assessing the situation for youth employment and education in Germany are larger than differences. This is at least remarkable because besides administrative bodies social partners were also interviewed. There were two basic outcomes of note: The field of competence concerning support for disadvantaged young people has to be more centralized and the freedom to choose between educational paths especially between vocational and tertiary education has to increase. Different to other European countries, the favourable situation on the German labor market enables policy makers to concentrate on rather specific subgroups than on youth in general. These are the most disadvantaged on the one hand and potential academics on the other hand. Although these to subgroups are very different they face a similar obstacle, which is the access to further education. In case of disadvantaged young people these obstacles refer to the employers’ perception of being unable to train these people, whereas the freedom to choose between educational paths is an administrative issue. All experts agree that the freedom to choose between educational paths should be increased by recognising and crediting educational performance between vocational and tertiary education in both directions. Besides the agreement among the experts that disadvantaged young people need assistance from a single source, trade unions expect an increase in employers’ effort to help disadvantaged young people.

Main issues of debate

Subheading 1: Matching
Despite the favourable performance of the German labor market there is still a large share of long-term unemployed or excluded young people. Individuals with no or only primary education are by far the largest share of long-term unemployed people, which is why a decrease in the amount of NEETs is seen as one major key to decrease long-term unemployment in Germany.

In the German vocational training system, unfilled positions exist besides persons who search for training. Regional and occupational matching problems lead to this situation. This is induced by the on-going demographic change and “academization” of society, which decreases the supply of labor for these occupations and the decreasing willingness of employers to train new professionals. Unfortunately, the decrease in supply and demand does not balance out because occupations are affected differently. Whereas the demographic change leads to a balanced decrease in labor supply for all occupations, the “academization” decreases the pool of potential candidates in general and especially the share of more capable candidates. This is why the potential labor force of the less capable is becoming more important. Facing this issue is important to prevent future labor shortages and decrease unemployment and thus taking pressure off the social systems.
Regional matching problems are less of an issue and if it occurs the solution is probably much easier, compared to social trends like “academization”, by increasing mobility of employees.

Subheading 2: Disadvantages young people
There is a broad agreement that offering more assistance to these people could improve their situation. Depending on the current status, different proposals are seen as promising. In case that someone already got unemployed fast and targeted support is important. Ideally, this support would have the distinction of being delivered from a single source. At the moment, depending on the needs and situation of the youth, different jurisdictions are responsible. This leads to several visits to different authorities and thus increases the probability that some get lost somewhere in the process. Centralizing the support for young people should deal with this issue. Experiences of success are very important for young people which became unemployed. Ideally, case workers place young people into employment and accompany them for a while. However, that would require a minimum of qualification, which is sometimes not given. The transitional system should take care of these cases. The transition system, however, is improvable. Improvements are possible by making it more transparent and bringing it closer to the operational reality. Modular training is one possible approach, where young people can attain qualification levels step by step leading to fast experiences of success. The best practice, however, would be if young people do not get unemployed. An increase in early career guidance, more internships in school and cooperation between schools and employers would improve the situation.

Subheading 3: Freedom to choose between educational paths
In Germany, vocational training often already starts at minor age. Most of them have only attained secondary education and are thus unable to start tertiary education after finishing vocational education. This is an important issue, because the decision between vocational or further schooling has to be made early in life where aims in life are rather unclear which is why changes often occur. However, the burden of going back to school restrains potential academics. In the past, several approaches were implemented to ease this burden, e.g. the subject-linked university entrance qualification due to professional experience. However, after several years of working restarting education is associated with strong income loses which is why this approach is often unused. Recent models, where vocational education is combined with the possibility of attaining university entrance qualification projects are assessed as much better practice.

The increase in academization, however, also increases the share of people who drop out of academic studies. Recognising and crediting university performance could increase incentives for these people to do vocational training. Concerning the demographic change, this could cushion skill shortages in occupations that require vocational education and are in need of qualified applicants like technicians.

Location: Berlin, Cologne, Bonn, Nürnberg (bi-lateral meetings)
Date: between 21 November and 5 December 2014

Participants:
• Dr. Jupp Zenzen, German Employers’ Association, Berlin, 21 Nov.
• Dr. Oliver Stettes and Dr. Regina Flake, Institute for Economic Research Cologne, 24 Nov.
• Dr. Günter Walden, BIBB, Bonn, 28 Nov.
• Benjamin Krautschat, German Trade Union Confederation, Berlin, 3 Dec.
• Dr. Achim Dercks and colleague, German Association of Cham-bers of Commerce, Berlin, 4 Dec.
• Jürgen Spatz, Federal Employment Agency, Nürnberg, 5 Decem-ber