Education and labour-market entry in Germany

In studies of labour market organization it is common to emphasize specific characteristics of the German education and training system and its relationship to the labour market. Related to these characterizations it is also a common topos of research that in Germany labour market position is predicted rather strongly by the level and type of education a person has received. This paper examines whether it is still valid in the light of data relating to recent developments and major macrostructural changes. With respect to the specific historical and institutional context in which the German education-labour market relationship has developed different hypotheses studying three dimensions of labour market outcomes are tested seperately for women and men: labour force participation and unemployment; level of prestige obtained in first job; and class position of first job. The empirical findings show that the specific German system of vocational training leaves its marks in a specific pattern of risks of unemployment. While it generally does not expose young labour market entrants to overproportional risks, it concentrates unemployment rather strongly among persons without at least an elementary vocational training. The data also confirm the hypothesis of only minor gender differences in returns to education at entry into the labour market which can hardly be understood as indicating different returns to education per se. Rather they are a result of the sex segregation of labour markets. The basic patterns of the effects of education have not fundamentally changed over time. At any rate there are no indications of a substantial decline in the general significance of education for prestige or class of first job, but we find a devaluation for one specific educational level: the Abitur. The devaluation of the Abitur cannot alter the conclusion that Germany continues to be a society in which education plays a very large role for the kind of job a young man or a young woman obtains when he or she enters the labour market. Rather the results indicate that the developments causing the devaluation of the Abitur underline the findings of earlier work elaborating the qualificational space as the crucial dimension of labour markets in Germany. But the strong occupational component of this qualificational space, both in education and training and in the organizational division of labour is to be stressed. Neither educational expansion nor the gradual transformation of the occupational structure from industrial to service occupations did fundamentally change these characteristic features of education-labour market linkages in Germany