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BIBB REPORT Edition 12/09

All quiet on the eastern front?

20 years after the fall of the Berlin Wall, vocational training is facing enormous challenges

Klaus Troltsch, Günter Walden, Susanne Zopf

The situation on the training place market is presently better in Germany's eastern states than it is in the country's western states, whereby it is impossible to say at this time what effects the current financial and economic crisis will have in the future. This difference between the eastern and western sections of the country is primarily due to the massive decline in the number of school leavers and the sizable amounts of government funding made available to the eastern states. Although the current demographic trend has improved young people's chances of finding a training place, it also creates serious new problems for companies and their efforts to ensure they have enough young skilled workers to replenish their workforces. The situation in which in-company vocational training in Germany's eastern states currently finds itself will also extend to the country's western half in the next few years. The following report constitutes an attempt at outlining developments in the vocational training system in Germany's eastern states during the last 20 years against the backdrop of economic, socio-demographic and education trends and at sketching a picture of these developments using official statistics. The analysis undertaken in this report shows that vocational training continues to be less firmly anchored in enterprises in Germany's eastern states than in their counterparts in the western half of the country.

The vocational training situation in Germany's eastern states since the fall of the Berlin Wall

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The vocational training market in the eastern half of the country eased in 2009, due in part to an enormous drop in the number of school leavers (Federal Employment Agency 2009; critical comments in this connection DGB 2009). For the first time, youths in the eastern half of the country have more training places available to them, in relative terms, than their counterparts in the western half of the country do. Prior to this time, a youth's chances of landing a training place in the 'dual' vocational training system (which combines part-time vocational schooling with practical work experience) were similar in the eastern and western sections of the country: Demand for training places was greater than the supply in both halves of the country. The supply-demand ratio (number of training places per 100 demanders) was 88.8 in Germany's western states and 91.3 in the eastern states (see Chart 1).(01) In fact, the ratio between the number of trainees and the number of employees who are subject to compulsory social insurance (vocational training rate) was slightly higher in the eastern states than in the western states (6.0 compared to 5.7) in 2008.

Establishing similar training conditions throughout the entire country however required the provision of significant amounts of government funding for new training places in the eastern states. The federal government allocated some €72 million for the Bund-Länder federal-state programme alone in 2008 (MÜLLER 2009, p. 229). Additionally, the states contributed at least the same amount in accordance with the programme agreements.

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Looking at only that segment of in-company vocational training which is financed by training companies (enterprises that provide in-company vocational training) and is not conducted on a subsidised, extra-company(02) basis, the training situation has been much more serious in the eastern states than in the western states to date. When adjusted for extra-company training contracts, the training rate (number in-company trainees per 100 employees) is much lower in Germany's eastern states (4.6) than in the western states (5.2). Other indicators also reveal marked differences between the eastern and western halves of the country. The share of training companies out of all enterprises is only 19.2% in the eastern states, seven percentage points lower than the share in the western states (26.4%). It is particularly striking that the in-company supply-demand ratio (number of in-company training places per 100 demanders) has been much lower in the eastern states to date. At 61.2 it is some 20 points lower than the in-company supply-demand ratio for the western states.

Chart 2 shows a breakdown of the in-company supply-demand ratios for the individual Employment Agency districts in Germany. Seen from a demander's point of view, all regions in the eastern half of the country exhibit unfavourable ratios without exception. Further, the vast majority of regions with the lowest ratios are located in the eastern half of the country. For example, an examination of the dual vocational system that is limited to in-company vocational training reveals that the situation in the eastern states is considerably more difficult than it is in the western states - 20 years after the fall of the Berlin Wall. Dual vocational training in Germany's eastern states is still marked by special conditions. Additionally, vocational training structures in the eastern states are very different than those in the western states.

This report outlines developments and trends on the basis of information from the following sources for official statistics:
Surveys conducted by the Federal Institute for Vocational Education and Training cover new training contracts that were signed during the period from 1 October of the previous year through 30 September of the survey year and were still in effect on 30 September of that year.

The Berufsbildungsstatistik vocational training statistics of the Federal Statistical Office cover the number of contracts signed and examinations sat as of 31 December of each year plus the number of trainees undergoing vocational training for a state-recognised occupation that requires completion of initial or advanced vocational Training.

The vocational training statistics of the Federal Employment Agency are drawn from data from the training placement activities of the Federal Employment Agency and the branches of the Federal Employment Agency that are responsible for ensuring the basic minimum income level of job-seekers in accordance with Volume II of the German Social Code. These statistics are the only information about supply and demand on the vocational training market that is available on a monthly basis and is broken down by occupational category and region.

The Federal Employment Agency also issues employment and labour market statistics. Employment statistics focus on employees who are subject to compulsory social insurance and on 'marginal' part-time workers. The monthly figures on unemployment in Germany and its structure plus data on vacancies that are registered with employment offices are published in the labour market statistics

The IAB-Betriebspanel (IAB Establishment Panel) sample survey of the Institute for Employment Research (IAB) gathers information on vocational training from some 16,000 enterprises every year.

The official employment statistics of the federal government and state governments show the average number of gainfully employed persons and the number of hours they worked during a particular reporting period for the individual states and urban and rural districts, broken down by sector. The states' macroeconomic accounts contain key indicators from the national accounting system at state and (when possible) district Level.

The population statistics issued by the Federal Statistical Office update the population figures between censuses. These statistics record not only natural changes in the population but also migratory movements.

Break-up of the vocational training system after the fall of the Berlin Wall

The institutional conditions that had previously been in place for vocational training ceased to exist with the collapse of the political and economic system of the German Democratic Republic. The regulations that governed vocational training in the old Federal Republic of Germany were then instituted in the new eastern states as well. As in the former West Germany, in-company vocational training was also very important in the GDR. Seventy per cent of all youths in the GDR who had completed grade 10 of their general secondary schooling subsequently underwent vocational training (see AUTSCH, BRANDES, WALDEN 1991, p. 10). Vocational training in both Germanys was based on the 'dual' system which combines practical work experience in actual enterprises with part-time schooling at vocational schools. In contrast to vocational training in the former West Germany, vocational training in the GDR was provided primarily at large enterprises due to the fact that collective combines and large enterprises dominated the GDR's economic structure (see AUTSCH, BRANDES, WALDEN 1991, p. 22).

Company vocational schools and centralised training facilities which enterprises funded were very important in this system. These training centres also conducted a significant portion of training on behalf of enterprises. All in all, there were 3,415 centralised training facilities, 939 company vocational schools and 239 municipal vocational schools in the GDR when the Berlin Wall fell (see AUTSCH, BRANDES, WALDEN 1991, p.11). Some 344,000 trainees underwent vocational training in the GDR in 1989. Approximately 90% of these trainees received their training in a centralised training facility. Seventy-five per cent of the trainees had training contracts with large enterprises with more than 500 employees. In former West Germany, this group constituted only 20% at that time (see AUTSCH, BRANDES, WALDEN 1991, p. 23).

The establishment of free-market structures led to the dissolution of collective combines and large enterprises. This eliminated the economic foundation for vocational training in the form that had been used until that time. The vocational school system was subsequently reorganised at state level. In-company vocational training had to be given an entirely new structure in the wake of the region's economic transformation. Companies that had been spun off from the large-scale enterprises which had played a dominant role in the GDR's economy up to that time and new firms had to first establish themselves in the marketplace. Many of them did not consider the provision of in-company vocational training to be one of their foremost tasks.

This was further compounded by the difficult economic situation in Germany's new eastern states which led to massive job losses and migration to the western states (BRENKE 2009). In the years following the collapse of the GDR, the number of gainfully employed persons in the new eastern states fell from 9.2 million in 1989 to 6 million in 1993 (see PRIEWE 1994). Further, many large enterprises were dissolved, leading to a situation in 1990/91 where one out of every five applicants for a training place came from a bankrupt company (see BERGER, WALDEN 2002, p. 23). It became clear relatively soon after the fall of the Berlin Wall and German reunification that there would not be a sufficient number of training places on offer unless the German government provided massive assistance.

Government assistance for the restructuring of the vocational training system

Germany's federal government, state governments and the Federal Employment Agency provided enormous amounts of funding to assist vocational training in the years following the start of the restructuring process in the country's new eastern states. The modernisation of the vocational training infrastructure was financed with these funds as was the modernisation of the region's vocational schools and the establishment of a network of extra-company vocational training centres that offer courses to supplement the vocational training provided in small and medium-sized enterprises. Small and medium-sized enterprises also received direct payments through a number of programmes to create additional training places or create training places for the first time. It was not however possible to meet the demand for in-company training places because the number of youths was, at the time, on the rise due to the demographic trend. For this reason, extra-company training places were additionally made available. This funding was initially made available through the assistance provided for disadvantaged persons through the Federal Employment Agency and, starting 1993, through joint campaigns conducted by Germany's federal and state governments. The joint federal-state campaigns for eastern Germany have been conducted since 1996 as part of federal-state programmes to promote vocational training in the eastern states. Whereas the joint federal-state campaigns for eastern Germany offset the shortage of training places primarily through extra-company training places that the government financed in full, a new funding concept was developed for the federal-state programmes. This concept is largely still in use today. The most important aspect of this concept is that vocational training was made more company-based. As a result, the amount of time spent attending classes in extra-company training facilities is limited and phases of practical in-company learning have been incorporated into the training.

The federal-state programmes are a major focus of government funding for vocational training in Germany's eastern states. Of the some 125,000 new training contracts that were signed in the eastern states in 2007, some 31,000 were contracts for government-subsidised, extra-company training. This is one out of every four contracts. Mention must also be made of additional state programmes that provide enterprises direct government assistance and of the training bonus for enterprises. Training bonuses are federal funds that are paid to enterprises for creating additional in-company training places, irrespective of whether they are in the eastern or western states. Reliable estimates of the total amount of government funding that has been provided to support in-company vocational training in Germany's eastern states over the entire period since the fall of the Berlin Wall until today are unfortunately not available. For example, federal funding provided for the federal-state programmes alone during the years 1995 to 1999 totalled some €600 million (see BERGER, WALDEN 2002, p. 144). Although it can be assumed that the amount of funding provided since 2000 has decreased due to the declining number of school leavers, the amount of funding provided by the federal government in 2008 was still €72 million. Total funding provided through all federal and state programmes and the Federal Employment Agency was probably several times this amount. BERGER (2003, p. 7) estimates that the funding provided to assist in-company vocational training in Germany's eastern states averaged €474 million a year during the period 1997 to 2000.

Developments in the training place market in Germany's eastern states

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A comparison of Germany's eastern and western states reveals three different strands of development that should be highlighted with the help of selected indicators. As can be seen in Chart 3, the level of participation in the provision of in-company vocational training for youths (training company rate) seen among enterprises in the eastern states is much lower than the level seen in the western states (left-hand scale, Chart 3). In addition, the training company rates in the eastern states(03) and the western states experienced a phase of a growing convergence until the years 1999 and 2000 which marked a break in this trend. Since then the training company rate for the eastern states has returned to the level seen in 1995 and the gap between the two regions has grown again.

The gap between the eastern states and western states in the size of the share of trainees out of all employees (training rate, right-hand scale, Chart 3) developed diametrically to this. Following an initial period of positive development, the training rate in the eastern half of the country has been on the decline since 1999. Despite this, since 1996 the training rate for the eastern states has remained higher than the rate reported for the western states. This has also led to a situation in which - relatively speaking - a smaller number of firms are providing in-company vocational training for youths in the eastern states and are thus investing more in the provision of training compared to their counterparts in the western states. Training density - the number of trainees per enterprise providing in-company vocational training - was 3.9 in the eastern half of the country and only 2.9 in the western half in 2007.

This however obscures the actual conditions on the training place market in the eastern states since education measures were put to disproportionate use in the eastern half of the country to assist training companies there. Thus, when for example the growing numbers of trainees who have an extra-company training place are excluded from the calculation, the resultant training rate for just in-company vocational training in Germany's eastern states is not only lower than the rate in the western states, it has also continued to decline since 1999. This is confirmed by the following figures: The share of extra-company vocational training out of all training offered in the eastern states rose from 23.3% in 1999 to 31% in 2004. By contrast, this figure was something more than 4% in the western states.(04) In this regard, the relatively positive development seen in the training place market in the eastern states until 1999 (TROLTSCH/ULRICH 1999) has deteriorated significantly since then. The latest figures show that extra-company training still constitutes 24.6% of all training in the eastern states.

Chart 3 also shows the duration of selected education measures that were launched to support the training place market in Germany and were supposed to help ensure a sufficient number of training places for young people wishing to undergo vocational training(05) There is no indication that these measures had any effect on the training rates in the western states. This is due in no small part to the fact that the training place market in the western half of the country is strongly coupled to trends in the demand for skilled labour and the employment system (TROLTSCH/WALDEN 2007). Looking at the eastern states, it can be assumed that, with the exception of the initial success posted in the 1990s, the in-company training rate has stabilised at a lower level than in the western states.

Structural change at a rapid pace

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One reason for the negative development seen on the training place market in the eastern states since 1999 could be the region's low level of economic growth. The gross domestic product per resident after adjustment for price rises does not however substantiate this. Although this indicator continues to be lower in the eastern half of the country than in the western half (STATISTISCHES BUNDESAMT / FEDERAL STATISTICAL OFFICE 2009), economic growth in the eastern states has picked up since 1996 and even slightly exceeded the western states' level of growth in 2001. The obvious assumption that dual vocational training's cost-benefit ratio has deteriorated in recent years in the wake of the growing cost of vocational training - with the consequence that more and more enterprises stopped providing in-company vocational training - is not confirmed by the findings of recent or older surveys of companies in eastern Germany (WALDEN 2007a, DIONISIUS et al. 2009).

Clear-cut causes cannot be discerned at either economic or monetary level. The developments on the training place market could possibly have structural causes. In this respect, it is apparent that in-company vocational training is not as firmly anchored in the eastern half of the country as it is in the western half: The share of training companies in 1999 - not only among very small firms but also among large enterprises - was markedly smaller than the corresponding rates seen in the western states. Only among smaller medium-sized enterprises with 10 to 49 employees was the training company rate somewhat higher (TROLTSCH 2009a).

Chart 4 shows how drastic the development in dual vocational training in Germany's eastern states has been.(06) The number of enterprises declined by more than 13% and the number of training companies fell by 21% within the relatively short period of only eight years - and despite intermittent phases of economy recovery. The level of participation in the provision of in-company vocation training rose among larger medium-sized firms (100 to 499 employees). This could not however offset the declines in the other company size categories. This trend is particularly unfortunate given that 83% of all lost training places were reported by very small enterprises with fewer than 10 employees and small medium-sized firms (with 10 to 49 employees) - size classes that were supposed to particularly benefit from the measures initiated to support the training place market in the eastern states.(07) Thus, the decline in the number of very small training companies in the eastern states constitutes a shift in the provision of in-company vocational training that had already begun in the western states in the early 1980s (BARDELEBEN/TROLTSCH 1997).

Vocational education apparently functions differently in the eastern states than it does in the western states. This can be seen from the fact that, with few exceptions, the share of enterprises in the western half of the country that provide in-company vocational training exhibits a more positive / less negative development that would be expected in light of the general trend in the number of companies. By contrast, in-company vocational training in the eastern states - particularly in small firms and large enterprises - was the first 'victim' of negative developments in the stock of companies. It is conceivable that the tradition of providing vocational training could not become as firmly rooted in the eastern states over the last 20 years as was possible in the western states in the 40 years since the Vocational Training Act was passed in 1969.(08)

The western half of Germany has had the chance to adapt to the economic structural changes in the global economy and to the trends toward a knowledge economy and service society since at least the mid-1970s (WALDEN 2007b; UHLY/TROLTSCH 2009; TROLTSCH 2009b). The eastern states - where the economy was more strongly shaped by large-scale enterprises and industry and geared to exporting to other Eastern Bloc countries - have had to accomplish this change at an accelerated speed in the years since 1990.

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A comparison with Chart 3 indicates that the transformation process during the 1990s still had a quite positive impact on the share of training companies in the eastern states. A negative trend began only in 1999. As Chart 5 shows, this downward trend has been especially strong in the manufacturing industry in general and, with 57% fewer training companies, in the construction sector in particular. Although these shifts in the eastern states' economic structure exhibit a number of parallels to the shifts seen in the western states, they still differ primarily in that - with few exceptions and in spite of the trend seen in the numbers of companies - the company training rates of service enterprises in the western states are very high in some cases. The development in vocational training in the service sector even takes a positive course in some cases, diametrically to the general development of the stock of companies. By contrast, the service sector in the eastern states exhibits mainly stagnation or decline, not only among all enterprises but also among training companies. Thus vocational training appears to be strongly affected at sectoral level as well by structural change.

Greater economic dynamics

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The economic dynamics in the eastern states are one fundamental factor behind enterprises' provision of in-company vocational training. Chart 6 shows the portion of enterprises providing in-company vocational training between 1999 and 2009, broken down by the enterprise's status in the vocational training market.

Based on this, the economic dynamics in Germany's eastern states have apparently been greater than in the country's western states and have had a marked effect on the dual vocational training system and on the number of training places that enterprises in the eastern half of the country offer. For example, only 4.9% of all enterprises in Germany's eastern states provided in-company vocational training on an on-going basis. This figure is nearly 40% lower than the 8% reported in the western states. The share of enterprises in the eastern half of the country that started providing in-company vocational training for youths totalled 2.6% among firms that reported employees back in 1999 and 4.1% among new companies. Both these figures are much lower than the rates seen in the western states.

Conversely, at 5.7% the share of firms that ceased business operations entirely or no longer have any employees who are subject to compulsory social insurance reported is noticeably larger than in the western states. This substantially reduces the available reservoir of east German enterprises that could train youths. The impact this has on the amount of training offered in the eastern states is even more negative given that according to calculations from the Institute for Employment Research the share of enterprises that are authorised to provide in-company vocational training is 46% - more than eleven percentage points lower than the corresponding share in the western states (STEGMAIER 2009).

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An interesting trend on the labour market which is highly relevant to the dual vocational training system in the eastern states could be observed between 1991 and 2008 (Chart 7). During this time the stock of employees who are subject to compulsory social insurance became 'decoupled' from the total stock of gainfully employed persons.

As used here, the term 'gainfully employed persons' encompasses not only employees who are subject to compulsory social insurance but also civil servants, self-employed persons, free lancers as well as persons who are marginally employed on a part-time basis, temporary/loaned workers and other, more flexible forms of gainful employment which have come out of the labour market reforms that were implemented in recent years. The gap between gainful employment and employment that is subject to compulsory social insurance grew considerably more in the eastern states than in the western states. Since the level of employment that is subject to compulsory social insurance remained stable in Germany's western states, this trend was not as pronounced in that half of the country. In the eastern states the decline in employment that is subject to compulsory social insurance was particularly sharp among women: Their number shrank by 18.6 percentage points up to 2008, whereas the number of their counterparts in the western states increased by 2.5 percentage points in the years since 1991. It must however be remembered here that the labour force participation rate of women in the GDR was considerably higher than in the former Federal Republic. The third indicator - after the gainful employment rate and the employment rate - for assessing the labour market situation in Germany's eastern states is the unemployment rate. Here the unemployment rate continually rose as the gainful employment rate steadily increased. The unemployment rate then 'stabilised' at a high level from 1997 until 2005. Only then did the number of unemployed persons begin to decline and employment that is subject to compulsory social insurance fall into line with the trend seen in gainful employment.

This shows that jobs are apparently being cut, primarily at the expense of jobs that are subject to compulsory social insurance. Full-time jobs are being converted and, in some cases, substituted with alternatives that are more 'opportune' in terms of labour law and cost (VOSS-DAHM 2006, p. 8; BOOST/BUSCHER 2009, p. 77). This provides some indication of which substitution effects might have emerged with respect to the labour market as a whole, the number of in-company vocational training places being offered and vocational training behaviour. It can be assumed that rather than providing in-company vocational training themselves, enterprises in Germany's eastern states are recruiting workers from the external labour market or have since 1999 made first-time use or more use of new employment options that are aimed at making the labour market more flexible or have had to use these options due to their economic situation. 

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The fact that the gainful employment rate and the employment rate have moved in opposite directions is particularly interesting in light of the change in the direction of the training company rate that has been observed since 1999. Based on selected labour market measures, Chart 8 shows that the use of instruments for supporting the labour market and making it more flexible has developed similarly in the labour market in both sections of the country.

Looking at quantitative aspects, it is striking that marginal part-time workers are more important in the eastern states, while the hiring of temporary employees through temporary work agencies plays a larger role in the western states. Only after 2003 does the eastern half of the country fall into line with the trend seen in the western half (BRENKE/EICHHORST 2008, p. 246). This indicates that structural changes in the labour supply have occurred since the revision of key elements of Germany's labour market policies. These changes could have consequences for dual vocational training, particularly in light of the fact that the number of participants enrolled in training measures has generally risen since 1997/1998 (VANSELOW 2008, p. 9).

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Given the employment structures in the eastern states, demand on the part of enterprises for regular workers and skilled workers is another important factor - alongside the level of use made of new forms of gainful employment - that affects the training place market. Looking at the worker age structure in Germany's eastern states and its development over time, a comparison with the western states shows that the share represented by older age cohorts (persons age 50 or older) has grown markedly while the shares of younger age cohorts have shrunk disproportionately (Chart 9).

This should have already led in recent years to a marked replacement demand that would have had to be met by hiring younger skilled workers or providing in-company vocational training. However, recent studies on the willingness of enterprises in the eastern states to respond to this development as quickly as possible indicate a tendency in the opposite direction (GRÜNERT et al. 2007, p. 27 ff.). Given the current economic crisis and lack of demand for skilled labour, the willingness to provide in-company vocational training for youths and subsequently hire them upon completion of their training can be expected to decline (FRIEDRICH et al. 2009).

Decline in size of age cohorts that are of relevance to demand

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There is - in addition to the above outlined trends with their reciprocal effects on the dual vocational training system in Germany's eastern states - a further factor that will significantly restrict the ability to meet skilled labour needs and rejuvenate manpower stocks in the future, namely, the current demographic trend (Chart 10). There is generally little difference to be seen between Germany's eastern and western states when examining the course of the demographic trend in the different age cohorts. However, its effects became noticeable at an earlier point in time in the eastern states (see also RAGNITZ 2009): Dramatic declines have been reported in the eastern states, especially among the younger age cohorts (25%) since 1991. The decline in the western states reached 20% by 2008. In addition, developments that will gradually lead to an ageing of the region's potential labour force have been observed since 2001 even among the age group of 35-to-49-year-olds in the eastern states. As a result of this decline, by 2008 the stock of available workers in the eastern states had fallen almost to the level reported in 1991. This trend began in the western states only in 2006/2007. The only group to remain the same size was the group of persons age 50 or older in the eastern states.

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The decline in population numbers here was not due solely to natural changes in the population. It was also the result of the difficult conditions on the labour market and vocational training market in the eastern states. This situation led to skilled and unskilled workers migrating to the western states. A number of phases can be identified over the entire period under study (Chart 11).

Although several hundred thousand people moved from Germany's eastern states to the western states during the first few years following the fall of the Berlin Wall, the 'migration balance' between the eastern and western states tipped in favour of the eastern states during the period from 1994 and 1997. With the exception of these years, the eastern states reported increasingly large population losses. It can be assumed that these migratory movements primarily involved younger age cohorts who left the eastern states in search of a training place or a job and that these losses could not be offset without corresponding influxes into the eastern half of the country.

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The supply side of the training place market in the eastern states has come under pressure in the wake of changes in the structure of the region's economy and labour market. On the other hand, the current demographic trend has contributed to two contrary developments on the demand side. Although a decline in the number of applicants takes pressure off the training place market - as confirmed by current figures from 2009 - falling applicant numbers also shrink the potential work force and could also have a negative impact on the number of in-company training places being offered, as a result of the ever-smaller reservoir of applicants to choose from. The demand-side developments are shown in Chart 12.(09)

As a rule, there was a gap between the number of in-company training places offered by enterprises (training places) and the demand on the part of youths seeking a training place (applicants) throughout the entire period under examination. Applicant demand developed parallel to the number of school leavers. Enterprises apparently increased the number of in-company training places they offered in the 1990s with something of a time-lag in response to the increased demand from school leavers. Similarly, the decline in the number of in-company training places on offer since 1999 has probably been due to diminishing demand from youths. This increases the gap between applicants and vacant training places and thus leads to growing numbers of applicants who left the general school system before the respective reporting year (unplaced applicants from previous years) (ULRICH/KREKEL 2007). The training place market in western Germany differs from the training place market in eastern Germany in two ways. Firstly, the trend seen in the number of applicants in the western states has been uncoupled from the trend in the number of school leavers since 1998/1999. Secondly, the number of training places on offer has developed anticyclically to the number of applicants.

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These differences are not however of any particular importance for youths in either the eastern or the western half of the country. The computed placement rates(10) for placement in in-company vocational training exhibit a sharp downward curve in both the eastern and the western sections of the dual vocational training system (Chart 13). The computed share of youths who signed a training contract with a training company was still above 80% in the early 1990s. By comparison, it took until the years 1992 through 1994 before their counterparts in the eastern states reached a corresponding share of something more than 70%. After this time youths in both sections of the country faced growing difficulties on the training place market. It was only starting in 2005 that youths looking for a training place had more - but still not sufficient - opportunities to find a training place due to a growing demand for skilled labour (TROLTSCH/WALDEN 2007).

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The number of youths in school leaver cohorts that are relevant to training place demand is expected to decline, particularly in Germany's eastern states (see Chart 14). This decline has been particularly large among lower secondary school leavers who account for the majority of youths leaving school each year: Their number has fallen by 40,000 in the eastern states since the year 2000. This trend is boosted by the parallel decline in the number of intermediate secondary school leavers, both with and without a school leaving certificate. Thus, there were more than 30% fewer youths from the three core groups available as potential demanders for training places in 2007. This could lead to problems for enterprises in the eastern states. At the same time however this situation takes pressure off the training place market on the demand side. The starting situation is much better on the training place market in the western states where the number of lower secondary school leavers is growing and the number of intermediate secondary school leavers has remained constant.

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Overall, the eastern states reported displacement processes and changes in the education behaviour of youths who wanted to undergo vocational training (Chart 15). Extra-company vocational training is considerably more important in the eastern half of the country. According to training market statistics issued by the Federal Statistical Office, 8.5% of all persons placed(11) in the eastern states are placed in extra-company vocational training. This figure is only 2.1% in the western states. Placements in training alternatives such as basic vocational training year programmes, basic vocational training programmes (= first year) at full-time vocational schools, prevocational training year programmes and programmes (= grade 11) at specialised upper secondary schools accounted for 14.2% of all placements in the eastern states. A total of 7.9% of all placements were in training measures that were financed by the Federal Employment Agency.

An east-west comparison from this angle reveals the evidently different placement strategies used by the relevant bodies in Germany's eastern and western states. At 30.5%, the share of persons in the western states who were placed in the 'transition system' (12) was nearly one-third greater than in the eastern states. The question of whether youths opted for programmes at full-time vocational schools not by choice but rather due to a lack regular training places cannot be answered on the basis of the information provided by official statistics. The share of such youths is 13.5% in the eastern states and 9.4% in the western states. The same applies to transitions into the university system. Here the share in the eastern states is 21.5%, somewhat higher than in the western states. The share of youths in the eastern states who seek a training place but were still unplaced as per the official definition on 30 September was 1.1%. The share that was registered as being unemployed was 7.1%.

Conclusion: Dual vocational training still not anchored firmly enough in Germany's eastern states

Today, 20 years after the fall of the Berlin Wall, fundamental differences can still be seen between vocational training structures in Germany's eastern states and western states. Although the chances of making the transition to vocational training are now actually better in the eastern half of the country than in the western half, this is primarily the result of massive government assistance. This is indicated by the large share of extra-company vocational training and the much smaller share of training companies in the eastern states. Following the collapse of the GDR, the deep-rooted changes in the region's economic structures necessitated a reorientation of the vocational training system in the eastern states. Despite massive government intervention, this reorientation has not been sufficiently successful. This has been primarily due to the particular economic difficulties that have not yet been eliminated in the eastern states. The eastern half of the country continues to have higher unemployment than in the western half and the overall number of enterprises continues to decline. The demographic trend has been negative for years now and is probably particularly important in this connection. As a result of this trend, enterprises in the eastern states have a limited selection of training place applicants available to them. Analyses also show that measures to make the labour market more flexible have had (unintended) negative incidental consequences for the development of an in-company vocational training culture that is stable in quantitative terms as well.

Age cohorts that are of relevance as demanders of vocational training are shrinking at a growing pace. It can therefore be expected that once the current financial and economic crisis is over, enterprises in Germany's eastern states will be faced with the problem of not being able to meet their renewed need for skilled labour by hiring and training younger workers. It is hoped that enterprises will then more clearly recognise the need to provide in-company training themselves and additionally (re)discover youths with less favourable educational backgrounds as well as a target group for the training they provide. The example provided by Germany's eastern half and western half shows that sizable differences exist between regions in the vocational training field and an aggregated examination that differentiates only between eastern and western states is not enough. Vocational training research ought to devote more attention to these types of differences between regional vocational training markets.

  • 1 The 'expanded' definition for demand was used here. This calculation included not only applicants who were still unplaced as of 30 September of the particular year but also those youths who had been placed in an alternative measure but continued to seek an in-company vocational training place (Ulrich et al. 2009).
  • 2 Training for youths who are disadvantaged in the training place market, socially-disadvantaged youths, youths with learning difficulties, etc. is designated as extra-company vocational training. It is primarily government-financed. The learning venue is not relevant in this connection.
  • 3 Statistics from the Federal Employment Agency on the number of enterprises in Germany's eastern states that provide in-company vocational training are available only for the years 1995 onwards.
  • 4 These figures are taken from Grünert et al. (2006), p. 16.
  • 5 The Training Bonus initiated by the Federal Ministry of Labour and Social Affairs (Gericke/Troltsch 2008) and the STARegio and JOBSTARTER programmes that are funded by the Federal Ministry of Education and Research should also be mentioned here.
  • 6 Time series on these attributes from 1999 onward can be found at Troltsch (2009a).
  • 7 In addition, very small firms and small SMEs accounted for 47% of all jobs in 1999 (western states: 40%). See also Grünert (2007, p. 24 ff.) regarding the special effects that government funding measures have on the training place market in the eastern states and regarding the 'funding trap'.
  • 8 Cf. Herkner 2009.
  • 9 This information only partly reflects actual conditions on the training place market since the question of whether training companies report vacancies to and youths register with their local employment agency depends on the conditions on the regional training place market and in turn influences the degree to which local employment agencies become involved on the supply side or demand side through their placement services.
  • 10 Computed share of new training contracts in relation to the total number of school leavers from general secondary schools.
  • 11 Here, "all persons placed" is the total number of persons who ended up attending one of the types of measures listed here, irrespective of when they left secondary school.
  • 12 The term 'transition system' stands for enrolment in a full-time vocational school programme that does not lead to full vocational qualification, or participation in a basic vocational training year or a prevocational training year.

Related literature

Imprint BIBB REPORT

BIBB REPORT
Volume 3, Issue 12, November 2009
ISSN Internet: 1866-7279
ISSN Print: 1865-0821

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URN: urn:nbn:de:0035-0393-4