The German model of youth employment

01. Oktober 2011, Providence Journal

(Gastbeitrag von Klaus F. Zimmermann)

In the U.S., it is usually taken as a given in working life that the road to success leads through a four-year college. Given the profound cost of attending university these days, some parents begin saving for a child's tuition while he or she is still in diapers. The impulse is understandable. Doing better than one's parents has long been a way of defining the American dream.

But is this really the best path to success for most people? Recent data paint a questionable picture. While about 70 percent of U.S. high-school graduates go on to study at a four-year college, the sad reality is that only about 60 percent of them actually complete a bachelor's degree (or its equivalent) in any field even within six years of enrollment.

That means a surprisingly high percentage of America's young people are entering the labor force armed only with a high-school diploma and little or no work experience. Not surprisingly, America's youth unemployment is more than double the rate for the overall population.

Meanwhile, in such European countries as Germany, Austria and Sweden, youth unemployment is about half the U.S. rate. That is surprising since these countries, like the U.S., were hit hard by the global financial crisis. That they have not suffered the same kind of spike in youth unemployment may have a lot to do with managing the high-school-to-college transition in the most efficient manner.

Americans have traditionally viewed college as a must on the road to good jobs and financial security. Contrast that with Germany, where roughly two-thirds of people under 22 choose to enter apprenticeships, typically a three-year period of training at a firm. Along with related technical instruction at a vocational school, a young worker learns the skills required for a given occupation.

What the low youth-unemployment numbers and the good income prospects of skilled workers in Germany tell us is that the best guarantee to ensure future employability may well lie in obtaining real job skills. I am aware that there are those, especially American economists, who assert that German-style apprenticeships are an insufficient form of preparation given the complex demands of the contemporary economy. I beg to differ.

What has happened in the intervening years really speaks for itself. Unlike the U.S., Germany has not de-industrialized. Manufacturing remains a backbone of the economy. And apprenticeships often involve a fairly complex course of training, both in trade schools as well as at the company level. Along the way, apprentices learn key concepts of technology, business management, applied analysis and an ever higher degree of analytical reasoning.

Apprenticeships are therefore far more than on-the-job training and a transition to a young person's first job. They also provide a solid basis for the lifelong updating of one’s occupational skills. At a time when public and private budgets are very stretched, a determined focus on providing real, future-oriented job training can pay huge dividends. It is not expensive and does not require young people and their families to take on a lot of debt.

However, one thing is true: Whichever way one turns, executing any job-training strategy will take time for it to bear real fruit in the work place and in the broader national economy. It could well be a decade or two before the real impact is felt. With such long timelines, three things are deadly: The first is to hope for miracles, the second to refuse to decide on any strategy, and the third is to change the chosen strategy impatiently, often onto its very head, because the hoped-for results haven't yet materialized.

At least for now, the record would indicate that the German strategy, which mixes academic excellence with plenty of well thought out training options that do not require attending university, would have the upper hand over the approach of the U.S.

Come to think of it, we are witnessing a reversal of customary roles. One would expect Germany, not the U.S., to put more emphasis on taking the academic route.

What the German model also underscores is that the key to a successful jobs strategy lies in aligning the longer-term interests of citizens, companies and communities alike to create a prosperous future for individuals and the nation as a whole.

Working jointly and conscientiously, not haphazardly or at cross purposes, these forces can greatly facilitate the school-to-work transition by focusing on attaining practical skills. In the world of today, those can be very complex, and mastering them very rewarding.

Klaus F. Zimmermann is director of the Institute at the Study of Labor and professor of economics at the University of Bonn.

Nachdruck mit freundlicher Genehmigung.