Print version Recommend this page Press release
11/ 2008
Bonn, 11.03.2008
Focus the vocational training bonus on low-achievers with placement obstacles
In a majority recommendation, the Board of the Federal Institute for Vocational Education and Training (BIBB) has called on legislators to
- restrict the vocational training bonus that the German government has adopted to unplaced applicants from previous years who would otherwise have no chance of receiving in-company vocational training,
- avoid misdirected incentives and deadweight effects and
- keep red tape to a minimum.
In the BIBB Board's view, the target group in the current draft legislation is still too broadly defined. This is particularly the case for the planned discretionary payment of the bonus. In the Board's opinion, the bill urgently needs a sharper overall focus in order to prevent misdirected incentives and deadweight effects.
The BIBB Board advocates restricting eligibility for the vocational training bonus to unplaced applicants from previous years "who have completed intermediate secondary school at most and who have been seeking a training place without success for more than one year and who are personally disadvantaged."
Under German law, the BIBB Board has the task of advising the German government on fundamental issues involving vocational education and training. Representation on the Board of the Federal Institute for Vocational Education and Training is equally divided between labour, management, Germany's federal states and the federal government.
The text of the recommendation issued by the BIBB Board regarding the vocational training bonus:
Recommendation issued by the BIBB Board regarding the vocational training bonus
Focus the vocational training bonus on low achievers with placement obstacles
The Board of the Federal Institute for Vocational Education and Training (BIBB) calls on Germany's legislators to
-
restrict the vocational training bonus to those youths who would otherwise have no chance of receiving in-company vocational training,
-
avoid misdirected incentives and deadweight effects and
-
keep red tape to a minimum.
The target group in the current bill continues to be too broadly defined, particularly with regard to the planned discretionary bonus. The bill urgently needs a sharper overall focus in order to prevent misdirected incentives and deadweight effects.
The eligibility criteria are so broadly formulated in the bill that the bonus would also continue to be paid for the vocational training of high-achievers. For example, assistance can still be granted without restriction as a standard bonus for the vocational training of secondary general school pupils - approximately one third of all first-year trainees. In the case of the new discretionary payment of the bonus, even upper secondary school leavers would be eligible for the bonus. As a result, the number of youths who would potentially be eligible for the vocational training bonus would continue to top 300,000. Apparently even the German government is not assuming that the current bill will result in a clear concentration on real 'problem cases' among unplaced applicants from previous years, as indicated by the fact that its estimates for the cost of the vocational training bonus remain unchanged.
Implementing such a bonus would lead to significant misdirected incentives and deadweight effects. It would reward those enterprises that did not make an effort to provide additional training places in years past when the economy was particularly tight but now have considerably more need for trainees anyway due to the current upswing. On the other hand, the bill would not allow for precisely those enterprises that were particularly committed to providing additional training places - without the help of a bonus - during recent years and for this reason are now unable to create any further training places. A situation in which companies put their decision to provide new training places on the back burner - with an eye to the possibility of soon tapping this new source of financial assistance - must also be prevented.
For this reason, the target group must be more narrowly defined, particularly with regard to the planned discretionary payment of the bonus. The BIBB Board therefore calls on the Bundestag to limit the target group overall in such a way that the sole aim of the vocational training bonus will be to reach on a pin-pointed basis those youths who without the bonus would have no chance of receiving in-company vocational training.
Based on this, the target group should be defined as follows:
"Unplaced applicants from previous years who have completed intermediate secondary school at most and who have been seeking a training place without success for more than one year and who are personally disadvantaged."
The amount of financial assistance for getting low-achieving, disadvantaged youths into in-company training must vary according to the number of years of training the particular training programme involves. This type of assistance is a sensible supplement to the new options for supporting and flanking socio-educational assistance for in-company vocational training provided for low-achieving youths that were created with effect from 1 October 2007 under the Act on Improving the Training of Younger People with Placement Obstacles. Greater use should be made of these new instruments and of the assistance that is already available to trainees during their vocational training. They could make a vital contribution to ensuring successful training and to reducing the number of drop-outs. The Board will work toward their broader use.
Employees and employers are calling for financing the vocational training bonus not from social insurance contributions but from tax revenues because this bonus is unrelated to insurance and is to be paid to youths who themselves have never paid contributions to a social insurance fund.
