A comparison of initial and early life course earnings of the German secondary education and training system

Abstract

The German apprenticeship system is considered an exemplary school-to-work program for youth not intending to complete a baccalaureate degree. Yet the traditionally highly stratified system has been changing, with more students pursuing both general education and obtaining vocational certification. Using the German SocioEconomic Panel, this paper analyzes initial wage levels based on school quality and training track for two cohorts of non-university young adults, 1984 versus 1994. For the older cohort from the more stratified system, graduation from the lowest school track predicted lower initial wages which vocational certification did not ameliorate. Vocational certification did predict higher wages for youth from higher quality school tracks. In contrast, for the 1994 cohort among whom general education is becoming more prevalent, formal vocational certification is an important predictor of higher initial wages for both high and low quality school tracks. The earnings of the 1984 cohort are also compared five, ten and 13 years after labor market entry. Apprenticeship predicts higher changes in wages by the final period. Returns to specific vocational training manifest in higher initial wages, but the effect obsolesces quickly over time. This pattern of initial returns and obsolescence holds for subsequent vocational certification, suggesting support for lifelong learning.