*Perspective Chapter: Sustaining Dual Apprenticeship Systems – Similarities and Differences... DOI: http://dx.doi.org/10.5772/intechopen.112561*

level differ from broader reference aggregates of countries (EU22, OECD, and G20) in some key characteristics of overall education structures. **Table 1** gives an overview of observations to the questions addressed.




educ = Education; health-wf = Health and welfare; hum-soc = Arts or humanities, social sciences, journalism and information; bus-adm = Business, administration and law; n-sci = Natural sciences, mathematics and statistics; engi-man = Engineering, manufacturing and construction; ict = Information and communication technologies (ICT); oth = Other fields


**4. Adult (25-64y) population attainment compared to young (25 − 34y) generation**

Adult population compared to young generation attainment (percentage, column)


### *Perspective Chapter: Sustaining Dual Apprenticeship Systems – Similarities and Differences... DOI: http://dx.doi.org/10.5772/intechopen.112561*


*AT = Austria, DE = Germany, CH=Switzerland; Av.appr = average of the three countries AT, DE, CH; Av. = average; upsec = upper secondary education, postsec = postsecondary non-tertiary education, tert = tertiary education; min = minimum, max = maximum, DIFF = difference. Source: own table, calculations based on [23].*

#### **Table 1.**

*Education structures in Austria, Germany, and Switzerland compared to EU22, OECD, and G20 average.*

of doctorates is markedly more frequent than in OECD and EU22. Among the individual apprenticeship countries tertiary education is below OECD and EU averages in Austria (like G20) with a tendency towards the lower end of tertiary education (postsecondary and short cycle); in Switzerland, on the opposite, tertiary education is near/above the averages with a tendency to the high end (doctorates); and Germany counts in between with a slight tendency to the high end (doctorates). The distribution of fields of study shows in the apprenticeship countries first consistently higher proportions of engineering etc. and lower proportions of humanities etc., second more similar structures in Austria and Germany in three fields (engineering, humanities, health), third some specific constellations in Switzerland (higher proportions of similar size in the three

fields of health, business, engineering, etc.) and in Austria (lower proportions in ICT and natural sciences), fourth a most diverse constellation in the education studies field (higher proportion in Germany, lower in Austria, and very low in Switzerland).


In sum, the comparison of overall education structures gives quite small differences between the paradigmatic apprenticeship countries to EU22, OECD, and G20 averages. The overall structure of educational attainment gives mixed results, the current cross-section of the adult population shows higher attainment of upper secondary education, and lower attainment of both higher education and below upper secondary education. The dynamic in the younger generation runs toward higher education; however, does not show comparatively favorable results for the below-upper-secondary educated. The comparison of the individual apprenticeship countries shows some differences, with a more favorable position of Switzerland and a less favorable position of Austria, and Germany in between.

#### **2.2 Apprenticeship and youth unemployment – which relationship?**

The most established advantage of apprenticeship systems is access to employment and low unemployment; this is shown in various ways [14, 24]. However, at a second look, several questions emerge about the mechanisms that cause this relationship between apprenticeship and low unemployment.

One aspect that is often overlooked concerns the definition of unemployment. In political discourses mostly the statistical artifact of the unemployment *rate* is used that relates unemployed persons to the labor force. This indicator is often confused with the *proportion* of unemployed persons in the youth population. Because the labor force makes up only some part of the youth population (and with an increasing stay in education this part declines), and young people in formal (school) education are mostly not counted as labor force (because they do not fulfill the criteria of availability for employment), the unemployment *rate* is often much higher than the *proportion* of unemployed young people to the whole youth population (empirically the unemployment rate is mostly about double the proportion of unemployed among young people) – thus the confusion of the unemployment rate with the proportion makes look youth unemployment numerically much higher than it really is by the proportion indicator.

#### *Perspective Chapter: Sustaining Dual Apprenticeship Systems – Similarities and Differences... DOI: http://dx.doi.org/10.5772/intechopen.112561*

Because apprentices in traditional systems are – different to school students – mostly counted as part of the labor force, the measurement base of the proportion is endemically higher and might make unemployment rates look lower. This *employment relation* as a necessary part of quality apprenticeships constitutes a quasi-automatic contact between young people and employers, that can automatically easily explain the better employment prospects of apprentices. Beside the learning opportunities of young people and their productive contribution employers have also the opportunity of a more intense screening of their apprentices as potential employees, compared to young people from school directly applying for a job on the external labor market. In this structure the better employment opportunities are not primarily constituted by the educational qualities and outcomes of apprenticeship but by the automatically included employment relation.

Several studies have shown that the relationship between apprenticeship and youth unemployment is not so easy and straightforward [24]. Among eight countries with regulated and established apprenticeship systems in the 2010s, only the three analyzed in this chapter (Austria, Germany, Switzerland) are ranked at the low end of registered youth unemployment, two countries (Italy, Ireland) rank even at the high end of youth unemployment.

More detailed analyses of youth unemployment by the regional political administrative units (*Länder*) in Austria [25] show some indications that a higher access rate to apprenticeship is slightly correlated with lower regional youth unemployment; however, this relation holds also with total unemployment (a causal interpretation would imply that the inflow in apprenticeship would reduce total unemployment – a completely stupid idea). The conclusion about this spurious correlation is that there must be various other economic and social factors that intermediate between the amount of regional establishment of apprenticeships and the employment or unemployment situation. The marked regional differences in access to apprenticeship, and thus the varying degree of the regional establishment of apprenticeship within the country is one of the factors that deserves an explanation.

#### **2.3 The role of labor market development and policy in apprenticeship**

The overall economic and labor market conditions are twofold important for the situation in apprenticeship because the youth labor market is part of the overall labor market. That means first that positive general economic conditions and dynamics provide positive conditions for the youth labor market and apprenticeship as part of it. Second, it is well known that the reactivity of the youth labor market to the economic ups and downs is high, thus economic stagnation or downturn has quite immediate negative consequences for the apprenticeship. Thus, the most important asset of apprenticeship is the most vulnerable to external conditions. This can explain, why governance and policy factors receive so much attention in the concept of quality apprenticeship.

To demonstrate these problems, the changes in youth unemployment over time can be compared to overall unemployment, and the attempts of influencing the youth labor market through labor market policy measures can be observed. Indeed, youth unemployment is over time strongly related to overall unemployment. Previous analyses [26] about the period 1999 to 2011 have shown that in the selected apprenticeship countries both indicators, adult and youth unemployment show a similar development compared to the European average of these indicators. Adult and youth unemployment *both moved almost identically* in a range between 40 and 60 percent of EU average in

Austria and Switzerland. This perspective does neither indicate a structural reduction of the youth unemployment level compared to adults, nor a different change over time. Only Germany shows a different picture. In this country, youth unemployment with a range between 40 and 90 percent of EU average differs from the level of adult unemployment with a range between 60 and 140 percent of EU average. In this country, the level of youth unemployment is substantially lower in comparison to EU average than that of adult unemployment, however, compared to Austria and Switzerland the German level of youth unemployment is at the same time markedly higher, and over time adult unemployment shows a more favorable development than youth unemployment within this country. In sum, these comparisons do not reinforce the expectations about a visible and robust relative reduction of youth unemployment in apprenticeship countries over the time of the "great recession" in the late 2000s.

Because of the employment relation of apprenticeship, this sector is included in industrial relations and social insurance systems, including unemployment insurance. This inclusion of apprenticeship into social and labor market policy is particularly institutionalized to a high degree in Austria. Since the coincidence of the high demographic supply of young people with an economic downturn in the early 1980s massive interventions in the youth labor market have been sustained under a high cross-party political consensus. These labor market policy interventions included *four kinds of measures*,


Austrian evaluations show temporary very high rates of inclusion of young people in labor market policy measures [26], regionally up to five in ten young people seeking support from the public employment service, and up to one in four enrolled in labor market policy measures. The OECD labor market policy database reinforces evidence of such strong interventions in the apprenticeship market. During the 2007–08 recession years, 14 percent of total labor market policy funds were spent only for apprenticeships, and 20 percent of all supported persons were enrolled in these measures. The OECD data, however, do not show a similarly high incidence of support for apprenticeship in labor market policy. In Switzerland lack of data undermines comparison, and Germany shows a similar incidence to Austria in the years before the recession (2004–05), but not a similar strong increase of measures during the crisis. Interestingly, the public discourse about the pros and cons of apprenticeship in Austria, highly driven by interest organizations, does insistently ignore this aspect of the impact of labor market policy for sustaining apprenticeship.

#### **2.4 Positioning and structures of apprenticeship in the trilogy countries**

This section goes deeper into two aspects, first how VET is positioned within educational participation in the trilogy countries compared to a broader set of OECD countries, and second how the trilogy countries differ from each other concerning their structure of apprenticeship measured by available financing, skills, and recruitment indicators.

In the three selected countries participation in vocational education at the upper secondary level is at the high end of OECD countries, between 60 percent and 70 percent of age groups, with positioning of vocational participation not at the first ranks, but in a range of 5 to 10 among 36 countries. Austria differs by an earlier start of vocational education, with 41 percent already enrolled at age 15 according to the Programme for International Student Assessment (PISA) study, compared to 6 percent in Switzerland (and no information in this data source for Germany).

Previous versions of the OECD education indicators [27] have provided agespecific information about interrelationships of the positioning states of education, employment, unemployment, and out-of-labor-force (non-employment) among young people, that are normally observed as distinct states; this indicator also allows to identify apprenticeship-like states (work-study programs). Two age groups of young people are distinguished that indicate upper secondary (15–19 years) and tertiary (20-24 years) education (in current versions of the OECD indicators the distinction of age groups is not documented anymore, so such a detailed update is not possible [23]).

Grossly over both age groups, this indicator identifies overall participation in education between 85 percent and 90 percent on average and without much difference among the three apprenticeship countries, with participation going down in the older age group to a range around 45 percent, with lower participation in Austria (only 34 percent). Participation in definite apprenticeship programs is small on the OECD average (going gradually down from the younger to the older age group from 5 percent to 1 percent). The trilogy apprenticeship countries show a characteristic pattern that is not so commonly considered. In Germany, this proportion of participation in apprenticeship is similar in the younger and older age group (meaning that in this country participation in apprenticeship programs is similar among young people in the upper secondary level age group to the postsecondary-tertiary level age group); in Austria apprenticeship is mostly concentrated in the younger upper secondary related age group and very small in the older tertiary related age group; and in Switzerland the proportion of apprentices is comparatively highest in both age groups with a higher proportion in the younger upper secondary related age group.

The overall proportion of *interrelated education-employment-unemployment status positions* that indicate the complexity of education and (un)-employment careers, increases gradually by age groups from one-fourth to one-third. The biggest category among the interrelated status positions is in both age groups the combination of *education and employment* other than definite apprenticeships that might indicate the demand for employment experience among students. The proportion of interrelated status positions is about 10 percentage points smaller in the apprenticeship countries in both age groups; only in Switzerland, the interrelation of education and employment is higher in the older tertiary-related age group in Switzerland (indicating the incidence of higher professional credentials acquired by certification based on exams beside employment).

An interesting information in this table about interrelated status positions that adds to the above discussion of unemployment indicators is the interrelation of *education and unemployment*, indicating that unemployment is not always distinct from education. This position is low at the OECD average (1-to-2 percent), however, goes up to 5-to-10 percent of young people in some countries (e.g., UK, Netherlands, Denmark,

Sweden, Finland, and together in the Nordic countries), and is often a bit higher in the younger upper secondary related age group. Among the trilogy countries this interrelated proportion is very low (at 1 percent), and only a bit higher in the younger upper secondary-related age group in Switzerland. This status position might reinforce the demand among young people for seeking employment experiences besides education.

These patterns of interrelated status positions might be interpreted in two ways, first as signs of the demand for employment experience during studies, and second as a tendency of a drift of apprenticeship programs from only the secondary level to the tertiary level (e.g., the establishment of "higher vocational" education at tertiary level is a main issue in Austrian education policy indicating an interest to elevate vocational education from the lowest end of the education hierarchy).

The following reasoning and analysis look in more detail into the financing, skills, and recruitment of apprenticeships in the trilogy countries. Different structures and practices of dual apprenticeship in the three countries have become visible through the analysis of the financing of this sector of VET since the 1990s. Because the financing of apprenticeship includes a complex set of elements (apprentices wages, their productivity, training time, engagement of firm's workers in instruction, training personnel and infrastructure, etc.) the analysis of financing indirectly discloses much information about how a system works. In Germany and Switzerland, four waves of detailed studies about costs and returns of apprenticeship were conducted during recent decades. Austria has only marginally participated in this research; after the first systematic study comparing Austrian practices with German research results in the mid-1990s (see a summary of results and references in [16]), Austrian stakeholders hesitated to take part in this comparative endeavor – only recently some comparative results are available from 2016 [28].

The first comparison [16] gave substantial differences between Austrian and German apprenticeships that indicate the wide range of possible forms of enactment of such a system. In fact, despite a similar institutional framework, the two systems represent different worlds of dual apprenticeship. In a nutshell, the Austrian structure and practices represented a world of small or very small training enterprises in which the apprentices predominantly performed simple productive work supervised by fellow workers who performed their work tasks without losses of their productivity; in terms of financing this structure provided comparatively high apprentices wages (compensating for productivity) and minimal training personnel and infrastructure; on average, firms provided small net costs. The German apprenticeship world represented a world of large enterprises that provided a substantial training infrastructure with employed personal and material provisions. Of course, in both predominant worlds, the shadow of the opposite world also existed, and some sectors are situated in between these worlds; besides, because of the wide distribution of apprenticeship training among enterprises in different economic sectors and with different economic performances a high degree of heterogeneity/diversity of practices must be expected (e.g., apprentices are trained in world-renowned restaurants as well as in the existentially struggling tavern around the corner; the same dispersion can be found in other trades). This diversity is also reflected in the wide distributions of cost-benefitrelations within trades; at the time of the first studies, 33–40% of enterprises reaped net benefits in Austria, whereas this proportion was about two-thirds in Switzerland ([16], p. 166). In Austria the big majority of apprentices were trained alone in their firm (50%) or with only one colleague (a further 20%); only for a minority, continuous recruitment and training process took place, and only 5% experienced training in bigger groups of 10 colleagues or more. "In Austria, 60% of training enterprises

#### *Perspective Chapter: Sustaining Dual Apprenticeship Systems – Similarities and Differences... DOI: http://dx.doi.org/10.5772/intechopen.112561*

provided mere on-the-job-training without any specific investment in the training process. In those cases, the trainers do not even report any reduction in their productive capacity for training. Among the remaining 40% of enterprises, which invest in some infrastructure, about 30% report some reduction of the productive capacity of trainers through their supervision activities, and the remaining 10% of enterprises invest in some infrastructure, that is full-time instructors or some material investments, as workshops and the like" ([16], p. 166).

These differences are reflected in the cost-benefit relations of financing. In Germany expenditure for full-time trainers was more than threefold compared to Austria, expenditure for part-time trainers and infrastructure was about double (only apprentices' wages were about 20 percent lower in Germany, diminishing to some extent the difference in gross expenditure that was about 30 percent higher in Germany) [29]. More recent comparative information about financial indicators is available from [28, 30], summarized in **Tables 2** and **3**. Substantial differences between the three countries of comparison are reinforced by this information.

The published information about financial indicators is not very strictly comparable; gross costs depend on wage levels and purchasing power that is not controlled, and surveys from different years for different countries were used (for Austria the


*AT = Austria, DE = Germany, CH=Switzerland; y = year; av. (bold numbers) = average across years of training (1st to 3rd year; 4th year omitted because of downward bias with 3,5 years; gross cost = all expenditure of firms for apprenticeship training; net cost = gross cost minus returns of apprentices' productive contribution; index = costs in later years relative to 1st year. Source: own table, calculations based on information provided in [28, 30].*

#### **Table 2.**

*Indicators of financing apprenticeship in Austria, Germany, and Switzerland for long and medium programs by training years, different dates 2009–16.*


*AT = Austria, DE = Germany, CH=Switzerland; y = year; av. (bold numbers) = average across years of training (1st to 3rd year), RETENTION only after last year; size of training enterprises indicated by number of employees; %prod. = percentage productivity, qual. w = qualified workers, %qual. = percentage qualified tasks, appr. = apprentice; INDEX large/small = ratio of ">50"/" < 9"; recr = recruitment cost; gross = average gross expenditure; net = average net costs/benefits (negative sign = costs, positive sign = benefits). Source: own table, calculations based on information provided in [28, 30].*

#### **Table 3.**

*The productivity of apprentices and retention of apprenticeship completers by training enterprises in Austria, Germany, Switzerland, 2012–2016.*

most recent information, 2016 is provided; for Germany, information from the early to mid-2010s, 2012 and 2015 is used, and for Switzerland the information stems from around 2010, 2009 and 2012), the currency was sometimes converted, sometimes not, the different years of observation imply effects from inflation. Moreover, the concrete technique of estimation of the multitude of elements included in the financing of apprenticeship might differ from study to study. This partly inconsistent use of information for comparisons in the literature mirrors the difficulties in the observation of financing of apprenticeships in comparison to other sectors of education (schools, higher education), and indicates the risk of biased conclusions based on spurious information even in high-quality publications. A closer look at this published information is justified if only the imponderability and uncertainty of established knowledge and "evidence" is disclosed and new questions for understanding are opened. Therefore, the comparison in the current chapter is based on the
