Entry to the labour market after completion of qualification
How does integration into working life succeed?
Ralf Dorau, Robert Herter-Eschweiler
Germany has a low level of youth unemployment in international comparative terms. Practice-related (dual) training is often cited as a reason for this. But how do young people succeed in making the transition to the labour market and thus achieve integration into working life? This article uses data from the microcensus to analyse occupational integration approximately two years after successful completion of a vocational or higher education qualification.
Entry is successful in overall terms, but precarious in some cases
Youth unemployment in Germany was relatively low in 2017. This is also reflected in the fact that the unemployment rate amongst young people aged between 18 and 34 who achieved their highest vocational qualification in 2015 was 4.7 per cent (cf. Figure). Just over two thirds (67.2%) had successfully made the transition to employment two years after completion of their qualification. 28.1 per cent of this cohort were deemed to have made a precarious transition (cf. definition in Information Box). Nevertheless, the assumption is that these numbers will fall as the young people gain more occupational experience.
Evaluation takes place on the basis of the 2017 microcensus, which includes information on highest vocational qualification and year of completion. Data relates to the entire labour force aged between 18 and 34 completing a qualification in 2015. The evaluation does not take account of persons who have completed a qualification but are not in active employment or are not unemployed (e.g. further phases of training, parental leave, voluntary military service, German Federal Volunteers Service, voluntary social or ecological year). Advanced vocational and professional qualifications (master craftsman, technician, doctorates) are also excluded.
Integration into working life is presented on the basis of two characteristics. These are employment status (fixed term/permanent) and net income. Precarious employment is deemed to apply if a person has a fixed-term contract of employment or if net income is less than Euro 1,187. This sum represents 2/3 of the median earnings of all members of the labour force aged between 18 and 34 who work for a minimum period of 30 hours per week (€ 1,780). On the other hand, persons who are not in a fixed-term contract of employment and who earn a monthly net income of at least Euro 1,187 are considered to be integrated.
Integration after completion of qualification
The Figure shows that persons who have completed a full-time school-based qualification or a university degree are least likely to achieve successful integration. They exhibit the lowest proportions in this regard, 62.8 per cent and 62.3 per cent respectively. The proportion of precarious employment is particularly marked following a university qualification (34.2%). 29.5 per cent are in precarious employment after full-time school-based VET. Nevertheless, the unemployment rate amongst this group is significantly higher than that of university graduates (7.8% as opposed to 2.4%).
By way of contrast, chances of occupational integration are better after completion of a dual vocational qualification pursuant to the Berufsbildungsgesetz (BBiG) [Vocational Training Act] or Handwerksordnung (HwO) [Crafts and Trades Regulation Code] (64.4%). The risk of precarious employment is similar to that experienced by those with a full-time school-based qualification (29.6%). 5.9 per cent are affected by unemployment. This figure is lower than that for full-time school-based training, but higher than the rate recorded for university graduates.
Members of the labour force who have completed training in the healthcare, education and social sectors (HES) are even better integrated (69% integration, 26.6% in precarious employment, 4.4% unemployed). However, persons who have achieved a degree from a university of applied sciences achieve the best level of integration by some distance (82.7% integrated, 15% in precarious employment and only 2.4% unemployed). This group enjoys significant advantages over university graduates in particular.
What characterises a precarious situation?
If a differentiation is made between precarious employment by income and precarious employment by status, 46.6 per cent of the 2015 cohort fall into the former category and 66.2 per cent into the latter (cf. Figure). 12.8 per cent are affected by both. University graduates display a particularly clear level of precariousness by dint of employment status (91.3% have a fixed term contract of employment whilst 22.5% are in precarious employment by income). They are followed by members of the labour force with a degree from a university of applied sciences (79.7% in fixed term employment, 26.1% with a precarious income) and by those who have completed full-time school-based training (73.9% in precarious employment by status and 49.4% in precarious employment by income). The latter group also includes an especially high proportion of persons who are affected by both categories of precariousness (23.4%). The proportion of fixed-term employment is lower in the HES occupations (57.9%), although the level of precarious employment by income recorded for this group (49.6%) is similar to that displayed by persons who have completed a full-time school-based qualification. Of all the groups, members of the labour force with BBiG/HwO qualifications are the least likely to be affected by fixed-term employment (49.1%). The proportion of precarious employment by income is, however, relatively high (63.7%).
Company-based components of training favour progression to permanent employment
Although a vocational qualification affords protection against unemployment, it does not always guard against precarious employment. Two years after completion of qualification, training pursuant to the BBiG/HwO offers better chances of successful integration than full-time school-based training or a university degree. The main reason for this is the relatively low proportion of fixed term contracts of employment. Very good chances of integration are revealed in the case of degrees from universities of applied sciences. These also encompass dual courses of higher education studies, programmes which include large proportions of company-based practical placements.
Company-based training components also exist in the HES occupations. The chances offered by a qualification in this sector are similarly good to those enjoyed after BBiG/HwO training, although the high degree of demand for skilled workers clearly further facilitates entry to the labour market.
If the aim is to encourage more young people into dual training pursuant to the BBiG/HwO in future, entry salary could be a possible mechanism to increase the attractiveness of these training programmes and to offer young people a reliable basis for future life planning as they embark upon the world of employment.
Comparable studies looking at the first three years following completion of initial training reveal similar precarious proportions for cohorts in the 2000s (cf. Dorau 2018).
DORAU, R.: Prekäre Berufseinstiegsprozesse von Ausbildungsabsolventinnen und -absolventen in Deutschland von 1980 bis 2005. Bonn 2018 – URL: http://hss.ulb.uni-bonn.de/2018/4960/4960.htm (retrieved: 13.02.2019)
Dr., Research Associate in the “Qualifications, Occupational Integration and Employment” Division at BIBB
Dr., Advisor at the Statistisches Bundesamt [Federal Statistical Office], Bonn
Translation from the German original (published in BWP 2/2019): Martin Kelsey, GlobalSprachTeam, Berlin