Is Occupational Mobility in Germany Hampered by the Dual Vocational System? The Results of a British-German Comparison

Abstract

We compare occupational mobility in Germany and Britain and focus on the effects of the German dual vocational system. Based on a comparison of mobility rates for different occupations within each country and between the two countries, we find that mobility is particularly low in German apprenticeship occupations and conclude that the dual system impedes occupational changes. However, German mobility rates are also lower in non-apprenticeship occupations, and only a small part of the overall low mobility rate in Germany (almost three times lower than in Britain) can be attributed to the apprenticeship system. We conclude that institutions such as employment protection are more important for explaining cross-country differences in mobility. Moreover we find evidence for the claim that occupational mismatching at the beginning of working lives is more widespread in Britain.

How elastic is labor demand? A meta-analysis for the German labor market

“…Hence, the meta-analysis provides evidence for an inverse U-shaped relationship between substitution effects and skills, which has been reported in many studies for Germany (e.g., Fitzenberger and Franz 1998;Fitzenberger 1999;Koebel 2002;Peichl and Siegloch 2012;Lichter et al 2017;Peichl and Popp 2022). Reluctance of German firms to substitute medium-skilled workers may reflect the high-match quality arising from the dual apprenticeship system in Germany, which combines education at a vocational school with workplace-based training in a firm (Rhein et al 2013). As a result, medium-skilled workers account for almost two third of overall employment in Germany, mirroring a relatively high productivity of this worker group (German Statistical Office 2022).…”

“…Despite this evidence, the German labor market deserves a metaanalysis on its own. On the one hand, the German economy-the world's fourth largest by GDP with a total of 45 million workers-features several idiosyncrasies that may govern firms' responsiveness to wage changes in a special way: namely strong labor market rigidities (Schneider and Rinne 2019), an economic divide between West and East German labor markets (Schnabel 2016), the importance of the dual vocational system (Rhein et al 2013), an extraordinarily high export share (Lichter et al 2017), and long-term demographic decline (Hamm et al 2008). Given the specific nature of the German labor market, it is therefore likely that domestic peculiarities do not surface in the existing meta-analyses.…”

The Workforce Composition of Young Firms and Product Innovation - Complementarities in the Skills of Founders and Their Early Employees

“…As mentioned above, due to the information in our data, we obtain our measures for the business and technical skills of founders from their field of education, while we use information on the occupations in prior jobs for the employees. In general, we do not regard this to be a big issue because in Germany people usually start to work in the field in which they are trained (Fitzenberger and Kunze, 2005) and job mobility is comparatively low, as is mobility between different occupations (Allmendinger, 1989;Rhein et al, 2013). If transitions between occupations still occur it seems reasonable to expect that a move from a technical to a business occupation is the more likely event than a move the other way round.…”

Labor Demand on a Tight Leash

“…We can confirm empirically that firms' composition of vacancy 5 Occupations play a particularly important role in German labor markets. Under the dual vocational system in Germany, apprenticeship training determines the occupation of workers when they enter the labor market with only little re-training and occupational mobility later on in a career (Rhein, Trübswetter, and Nisic, 2013).…”