Social partners endorse training schemes for disadvantaged young people

In recent months, the social partners have highlighted the importance of vocational and other training measures for young people, as these can significantly improve their chances of finding a job and securing higher wages. In Germany, a growing number of school leavers have been unable to take up an apprenticeship or enter the labour market over the past few years. To reverse this trend, special training programmes for young people have been set up, which are sorely needed according to a study by the Bertelsmann Foundation.

In recent years, the situation of school-leavers in Germany has changed considerably. Many young people now encounter difficulties in securing an apprenticeship – in other words, a vocational training position – or entering the labour market. This trend is reflected in the rising number of so-called ‘old applicants’ (Altbewerber) registered at local employment agencies. Old applicants are defined as young people who failed to obtain an apprenticeship contract in the last round of applications. In 2006, for the first time, the share of old applicants among all applicants exceeded 50%. In August 2008, this percentage reached 52%.

These figures prove that young people today need greater support in completing the transition from school to professional life. As a result, special training programmes have been designed to provide the essential skills for a successful career start. A recently published analysis by the Bertelsmann Foundation (Bertelsmann Stiftung) considers the direct and indirect cost implications of these programmes and their effectiveness.

Study results

The Bertelsmann study (Volkswirtschaftliche Potenziale am Übergang von der Schule in die Arbeitswelt (3.2Mb PDF)) analysed vocational training courses for persons aged 25 years or younger. It focused on disadvantaged young people who had not succeeded in entering the labour market directly after leaving school by obtaining an apprenticeship position. These young people needed supportive measures because, for example, they held no or only a lower-grade school certificate. Supportive measures undertaken between 2001 and 2007 were considered by the study, which divided them into four areas:

  • occupational orientation measures, such as career counselling in schools;
  • occupational preparation measures, such as programmes preparing young people for a vocational training position in vocational schools;
  • supporting vocational training, for example by subsidising apprenticeship places;
  • integration into the labour market for the first time, for example by offering continuous vocational training.

These programmes prove to be cost effective when their total costs are compared to the follow-up costs resulting from not training young people. Untrained or low-qualified young people face a greater risk of becoming unemployed or earning lower wages that might have to be supplemented by welfare grants.

For example, in 2006, the federal government and the federal states (Länder) spent about €5.6 billion on training measures. In the same year, some 555,902 young people participated in occupational preparation measures or measures supporting vocational training. Therefore, €10,050 was spent on each participant. On the other hand, failure to integrate low-qualified workers into vocational training or employment generated costs of €11,961 per person, which thus exceeded the training costs for young people.

Study recommendations

It should be noted that these follow-up costs accumulate annually in the public budget, given that the lack of training, if not remedied, accompanies those affected for their whole lives. Therefore, the Bertelsmann study recommended that such training programmes be continued. The researchers even suggested further reform measures, such as:

  • reducing the number of school leavers who are not qualified to take up an apprenticeship;
  • reducing the time low-qualified young people spend in training programmes;
  • providing subsequent training opportunities, where necessary, for untrained and low-qualified workers.

The study pointed out that, if these steps were taken by 2015, further savings could be made and reinvested, for example, into pre-school education, continuous vocational training or other educational measures.

Views of social partners

In a press release (in German) issued in July 2008, the Confederation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB) emphasised the grave situation of old applicants. DGB Vice-Chair Ingrid Sehrbrock stated that in recent years companies had only creamed off the best applicants. She suggested that companies should also consider taking on old applicants with lower grades, such as young migrants who lack the formal prerequisites for a training position. Companies would be encouraged to do so with the introduction of bonuses payments granted to companies employing old applicants (DE0803049I). In return, companies could profit from migrants’ special skills, such as their multilingualism.

The German Confederation of Employers’ Associations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA) highlights the importance of well-trained professionals for German companies. On 5 December 2008, BDA held a meeting with young people to discuss new ideas on how to promote their career opportunities – see press statement (in German). Existing projects already set up by BDA and German companies were also presented. Special attention was paid to young people with a migrant background. BDA Vice-Chair Gerhard F. Braun emphasised that the participation of these young people reflected their sense of responsibility for, and serious interest in, their own professional futures.

Sandra Vogel, Cologne Institute for Economic Research (IW Köln)

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