Higher Education and the importance of apprenticeships: United Kingdom & Germany

Annabel Mempel // 28 February 2018

In 2017, youth unemployment (young people between 15-24, without work or enrolled in education) in the EU as a whole was on average of 16.1%. Yet, individual member states vary greatly in their numbers. Greece has a youth unemployment rate of 40% while the Czech Republic’s is only 4.9%.

Germany, the most populous member state, has a youth unemployment rate of only 6.6% while the United Kingdom’s rate is 12.2%. How come a country such as the United Kingdom, which serves as a home to the top universities in the world, still has major issues with youth unemployment?

Let’s conceptualise the problem with two exemplary cases: Emily, a young girl raised in London, and Sara, who is the same age but lives in Germany.

Emily only encounters possibilities after graduating at 16. Teachers help out with university applications but Emily dislikes studying and spending thousands of pounds seems strange to her. Yet, all of her friends have already applied and she decides to enroll for an architecture degree, as she enjoys drawing. Soon, she discovers that architecture does not suit her. There is excessive math and the subject does not seem relevant to her. The debt she had already generated so far discourages her from dropping out; she does not want it to be a waste (a possible case of the ‘sunk cost fallacy’). Emily finishes her degree with mediocre marks. Even though the construction industry is hiring strongly, Emily has a hard time acquiring an architecture job: she is over-qualified for open vacancies. She joins an architecture office at 22, but her employer is disappointed with Emily’s limited work experience. After 3 years, she moves up to a better paid position.

Sara is very similar to Emily. In 9^th grade, her school has every student participate in a two week internship to gain first experience, combined with a skill analyses test. Sara interns at an architecture office to see if this is a future direction. After two weeks, she did enjoy the creativity but the heavy math discouraged her. The years of university study required for the job also scared Sara. Studying for much longer does not seem exciting. One year later, the school has another internship opportunity. This time, Sara joins a landscape design office. It involves more manual work but Sara enjoys having to organize people. Her supervisor did not attend university nor graduated with an Abitur (highest school degree in Germany). After year 10, he started an apprenticeship at a florist shop. This encourages Sara. After graduating with good grades, not needing A-levels for landscape design, she signed up for an apprenticeship. She earns approx. 797€ a month and works and studies part time. This is a perfect combination. The practical skills encourage her to study to be able to apply it directly. After getting her degree, she immediately gets a job. Her skills are high in demand: in 2017 there were approx. 7000 open jobs in landscape and forestry.

It seems that German education enables pupils to pursue more diverse choices to find the right kind of education for their skills and interests. Even though the UK has improved the availability of educational options besides university such as graduating with GCSEs and offering vocational trainings, it still is not regarded as desirable. One of the reasons for this is that the pay of an apprentice is different: the British minimum wage for an apprentice is 3.50 pounds while a German apprentice earns around 6-14€ per hour worked (gov.uk; Bundesinstitut für Berufsbildung). While this might lead to higher demand from British employers in the long run, it can initially disincentives young students.

There are, however, more options than apprenticeships or a university degree. In Germany, there are many trade schools that teach specific skills, and there are also companies that cooperate with universities to offer Bachelor’s degree studies with work experience and a high chance to be employed by a company afterwards. This form of higher education has been introduced in April 2017 by the UK as well: degree apprenticeships. Yet, most people are not even aware of this option.  There is not enough data to judge the success of this programme, but it can be another factor in achieving a more diverse tertiary education system.

But, why should a business even start training young students? What do they get out of it? The German BIBB (Federal Institute for Vocational Education and Training) calculated opportunity costs for businesses in regards to their trainees. Obvious benefits include the opportunity to train skilled workers suitable to their respective field and ensuring the quality of the training if they decide to employ them afterwards, as well as saving additional staff even with additional training costs. They are investing in future employees. Businesses spend an average of net €5.398 per trainee across industries in Germany (Bundesinstitut für Berufsbildung).

While Germany is heavily trying to improve the reputation and accessibility of apprenticeships, the UK is still complacent.

In Germany, initiatives are in place to implement work experience in schools as well as programmes to help students discover skills they excel at and how to find matching professional paths for it. Other initiatives support businesses in starting to offer apprenticeships; many lack expertise and means of reaching out to young people. Making apprenticeships known, raising their reputation and providing opportunities for refugees is also an important focus.

In the UK, the government takes a different approach. Recently, there’s been talk about introducing 2-year university degrees. This will not be less qualitative than a regular 3-year degree and also not less expensive, but will enable students to graduate earlier and thus save money in living costs. While this might seem appealing, the question is whether a shorter period of learning the same amount is more beneficial than funding apprenticeships for industries in need of skilled workers.

Obviously there are funds to support apprenticeships, but regulations restrict employers in how and when they can offer apprenticeships. It has been difficult to pinpoint how trainings should be funded: by the trainees, the employers or through the government? Many companies, while complaining about skilled worker shortages, don’t offer apprenticeships themselves.

In general, there should be more opportunities for students to realize that they do not need a university degree to be successful. Reputation needs to be improved in order to convey that theoretical studying is a) not for everyone and b) not necessarily better in terms of securing jobs. The labour market would benefit greatly from more skilled workers and lower youth unemployment. Supporting apprenticeships means fewer university students, whose degrees would presumably rise in value, and fewer people working lower-quality jobs with excessive qualifications.

EPICENTER publications and contributions from our member think tanks are designed to promote the discussion of economic issues and the role of markets in solving economic and social problems. As with all EPICENTER publications, the views expressed here are those of the author and not EPICENTER or its member think tanks (which have no corporate view).