Bundesinstitut für Berufsbildung (BIBB)

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33/ 2006
Bonn, 13.09.2006

BIBB study: blanket reductions in training allowances will not solve the apprenticeship place problem

The blanket reduction in training allowances frequently being called for in current educational policy debate would offer virtually no solution to the problems on the fraught training places market. This is the assessment of a study carried out by the Federal Institute for Vocational Education and Training (BIBB) analysing the present structures of training allowances based on collective wage agreements and their development over the past three decades. "A reduction in training allowances can only achieve positive effects if certain conditions are in place", says BIBB President Manfred Kremer. "In return for an easing of the cost burden in collective wage agreements, companies would have to be required to provide training places in excess of their own needs. These additional training places would have to be clearly quantified and monitored in terms of achievement of objectives, in line with practice in the chemical sector, for example. The fact that smaller companies are not the sole focus of the creation of additional capacities will mean that the establishment of such regulations will also reduce the problem of a malfunction of the system."

One of the issues addressed by the BIBB study is the potential effects of the aftermath of a blanket reduction in training allowances. The fact is that major companies usually provide training in line with their own requirements for new workers. They view training as an investment from which they draw the benefit at a later date, namely when the fully trained skilled workers are in their employ for an extended period of time. For these companies, the savings effect generated by reduced remunerations does not represent a direct incentive to provide training beyond their own needs. Such a course of action only makes economic sense for companies if the trainees are producing net gains during the period of training itself. This, however, occurs mainly in smaller companies, thus making training with reduced training allowances more attractive for smaller companies.

According to BIBB's assessment, companies tending to display little interest in taking on trainees permanently after completion of training would probably further increase their participation in training were such a development to take place. Any blanket reduction in training allowances undertaken without agreements with the social partners could, therefore, lead to a malfunction in areas where there is a high quota of training but a low ratio of workers being taken on permanently after completion of training. There would be a deterioration in the level of opportunity afforded to trainees in terms of subsequent employment in the occupation they have learned. The consequences of this would be increased vocational reorientation, which would necessitate further extensive qualifications after completion of training.

In 2005, the average level of collective wage agreement based training allowances for Germany as a whole was €607 gross per month. The average for West Germany was €623, for East Germany €529. There are, however, considerable differences in the levels of remuneration depending on the respective training areas. Training allowances are relatively high in trade and industry occupations and in the public sector, but lower in craft trades, agriculture and the liberal professions. There are also large differences in total training costs for companies. Although these tend to be low in smaller companies (especially in craft trades, agriculture and the liberal professions) and are partially compensated for by the fact that the work produced by trainees generates net income, large companies (particularly in trade and industry) usually have very high training costs.

The BIBB study demonstrates that the respective prevailing situation on the training places market has exerted a strong influence on the development of training allowances over the past 30 years. In times when there was significant over-supply of training places and fears of a shortage of young workers, such as at the beginning of the 1990's, there was a considerable increase in training allowances. Whenever there is a shortage of training places, such as has been the case since the mid-1990's, there are frequently calls for an easing of the cost burden placed on companies providing training. The consequence of this is that there has been only a very slight rise in training allowances since 1996. In the past two years, increases have not even been in line with inflation.

Ursula Beicht: "Entwicklung der Ausbildungsvergütungen in Deutschland" (Development of training allowances in Germany). Published as Volume 12 of the BIBB German language series "Forschung Spezial" (Research Special), Bonn, 2006.

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 Preis: 14,80 Euro

Point of contact at BIBB for further information on this subject:
Dr. Günter Walden, Tel.: 0228 / 107-1315, Fax: 0228 / 107-2958, walden@bibb.de

Further information in English on "training allowances" is available on the BIBB website at: http://www.bibb.de/en/783.htm