New training measures to absorb 1998 and 1999 school leavers

The Austrian government, at the behest of the national social partners, is prepared to spend ATS 900 million in 1998 and again in 1999 on measures to absorb school leavers into employment and training. From 2000, the demographic "bulge" will have shrunk and so no more measures will be required.

After a compromise between the national social partners at the end of March 1998 on measures for school leavers (AT9803175N), the Austrian government and parliament set to work to thrash out the final legal framework by 10 June 1998. It provides for a series of temporary measures to facilitate the absorption of 1998 and 1999 school leavers into employment. ATS 500 million per year has been reserved for subsidies to enterprises and other organisations providing training and a further ATS 400 million per year for school-based courses. The number of unemployed school leavers on 15 November of each year triggers the release of funds. A maximum 4,000 first-time job seekers are expected to be without employment on 15 November 1998. Of these, 40% are to be absorbed by special providers of apprenticeships, and 60% by special training courses at vocational schools. Employment and training projects will have to be launched between 1 November 1998 and 31 December 1999. Three ministries will jointly decide on the applications but they will be handled and administrated by the Public Employment Service (Arbeitsmarktservice, AMS). Furthermore, measures prohibiting pupils with a large number of failures in the first year of certain types of school from repeating the year have been relaxed. In this way they will be kept in school, while in 1997 they were forced out on to the labour market. One estimate by the AMS puts the number at 3,500. The Ministry of Education (Bundesministerium für Unterricht und kulturelle Angelegenheiten, BMUK) says that many of them would have left school whether forced to or not.

New occupations and skill differentiation

A process of defining new apprenticeship curricula was begun in 1997 (AT9801159F). It aims at both formalising the training for new occupations and at updating training for traditional ones. By May 1998, more than 1,000 apprenticeship contracts had been concluded in new or updated occupations. The category of sanitary and air conditioning technician attracted 296 new contracts, that of communication technician 172 and that of administrative assistant 136. Others attracted none, partly because they were in declining industries (such as garment manufacturing) or in very small industries (such as speciality glass making). The newly defined category of concrete manufacturer also attracted only one apprentice.

In June 1998, another series of new and remodelled occupations was introduced on to the market. They include the builder of prefabricated houses, several new occupations in the mass media, and the so-called "systems gastronomer". The latter is basically intended as formal training for managers of fast-food outlets and franchises, and is proving particularly successful. By the beginning of June there had been 200 applications for the new occupation, and employers had hinted at 300 openings by autumn. The industry is seen as expanding dynamically and thus likely to offer secure job prospects. The next batch of training curricula is likely to be introduced in the autumn. It will comprise the following categories: fitness trainer and counsellor, model builder, parquet-floor layer, personnel agency clerk, production technician, engineering business assistant and a revised butcher.

The flurry of new occupations is flanked by a differentiation in the skill levels provided. While the new curricula mentioned above all fall into the regular three-year category, enterprises are showing some interest in adding "up-market" four-year and "down-market" two-year versions. The trade unions, however, are reluctant to allow this differentiation to proceed. While there were always a number of four-year curricula, this was never intended to create a category of more highly skilled workers but to provide average skills in particularly complex trades. There were never any courses shorter than two years. However, beginning in the late 1980s employers in the metalworking and electrical sector in the two westernmost provinces, motivated by the introduction of new technologies and by competitive pressures, created a number of high-skill four-year apprenticeship curricula. After implementing a pilot scheme they have now become part of the formal system: 32 industrial companies offer them and train 322 young workers. The final aim of the employers is to combine the vocational skills with a full 12th-grade school qualification in a bid to attract intellectually gifted young people into industrial skills.

A legal reform agreed between the governing parties on 9 June 1998 provides, for the first time, for two-year training courses. The scheme is called pre-apprenticeship, applies to all officially listed apprenticeable occupations, and is meant to teach the skills of a first-year apprenticeship over a two-year period. If a regular apprenticeship position becomes available, 25% of time served in pre-apprenticeship is counted towards the regular apprenticeship, provided that it is situated in the same general skill area. Other regulations (such as those on schooling and remuneration) are identical to regular apprenticeships. The scheme is temporary. The last date on which a pre-apprenticeship can be started will be 31 December 2000.

Either the measures, or the publicity accompanying them, are showing results. In Vienna, by May, the number of companies newly licensed to train apprentices had reached 312 - 50% more than the 210 of the previous year.

Evaluation of 1997

A recent report, Youth labour market policy in Austria, commissioned by the OECD and written by Lorenz Lassnigg at the Institute for Advanced Studies (Institut für Höhere Studien, IHS), found that the 1997 measures and the overall policy approach were generally effective, if expensive. ATS 1.4 billion was spent in 1997 on apprenticing 4,000 young people, less than 10% of all first-year apprentices. The (at times) poor coordination found between agencies, various levels of government and geographical regions was deemed beneficial on the whole, since it provided for a broad spread and, in the end, for a degree of choice. On the other hand, it also provided for a quick dissipation of budgeted resources and for enormous difficulty in evaluating the measures.

The study also found measures that overemphasised the need for apprenticeships and focused on occupations typically taken up by males, centred as they were on crafts. Amongst young people queuing for an apprenticeship, a disproportionately high number were women (though it was not mentioned in the report, it should be added that a disproportionately large number - about 20% - of the young people in the queue are the children of immigrants). A general criticism was also aimed at the role to which the apprenticeship system is increasingly being relegated. Since the early 1970s, a trend is observable whereby those suitable for school are being retained in a proliferating number of different types of school while the apprenticeship system is given the function of absorbing those who "failed at school". This is thought to have dampened the demand for apprentices and especially to have worked as a disincentive for dynamic new sectors of the economy to request the development of suitable curricula.

Commentary

The new measures basically follow the pattern familiar since similar earlier emergencies, but with some new departures. They can be described as effective, but expensive and unequal. The main benefit in the end may accrue from the massive publicity for apprenticeships and from the reinvigorated efforts to modernise apprenticeship curricula. While new interest in apprenticeships has been kindled, the demographic bulge is already shrinking and will have disappeared by 2000. At the same time, on past form, the proportion of young people from immigrant families staying on at school will rise. Thus the supply of apprentices is likely to dwindle even faster than suggested by demographics alone. The incentive to reform the training system will therefore remain acute, but the concern to make it attractive even in a few years' time is likely to shift from employers to young people. For the first time it may then have to compete actively with schools, and this will mean providing adequate returns on training. (August Gächter, IHS)