Occupation-specific wage returns: shedding light on differentials between employees with a VET degree either with or without an Abitur

Anett Friedrich,Sandra Hirtz

doi:10.1186/s40461-021-00111-5

Abstract

This study seeks to reveal the heterogeneity in occupation-specific wage returns among graduates of the German vocational education and training (VET) system. We distinguish between VET graduates with and without a higher education entrance certificate (i.e. an Abitur). To implement our hierarchical multi-level analyses, we exploit the latest wave of the BIBB/BAuA Employment Survey from 2018. By estimating occupation-specific wage returns, we reveal gaps between VET graduates with and without an Abitur. Additionally, we analyse several occupational characteristics to show how they contribute to the gaps in wage returns between our study groups. Our results show that employees combining an Abitur with a VET degree achieve higher wage returns than those VET graduates without an Abitur across all occupations. Employees holding a VET degree without an Abitur display greater inequality of occupation-specific wage returns. Among the occupational characteristics, task composition is the main driver of the differences in wage returns.

Highlights

Educational attainments and occupations play a major role for employees’ remuneration in Germany
Our descriptive results further reveal that VET degree with an Abitur (VET2) graduates are more likely to live in West Germany (78% of VET degree without an Abitur (VET1) graduates vs. 83% of VET2 graduates) and be foreign-born (6% vs. 12%); they are less often married (55% vs 51%); and they more often have children under 18 (32% vs. 37%)
By exploiting the latest wave of the Federal Institute for Vocational Education and Training (BIBB)/Federal Institute for Occupational Safety and Health (BAuA) Employment Survey 2018, this study compared the wage returns of vocational education and training (VET) graduates according to their school-leaving certificate

Summary

Introduction

Educational attainments and occupations play a major role for employees’ remuneration in Germany. The educational expansion has enhanced the average level of school-leaving certificates. Technological and educational developments raise the question of the relevance of school-leaving certificates. One can distinguish between two tracks: first, a vocational track including the VET system and, second, an academic track covering the higher education system (cf Figure 1). The second track incorporates gymnasiums and all other schools qualifying pupils for higher education. After 12/13 years of schooling, pupils receive the highest German school-leaving certificate, namely, the Abitur, which opens the track into the higher education system. In Germany (and uncommonly, from an international perspective), school leavers with a higher education entrance certificate can decide to take the ‘atypical’ path into the VET system (cf Figure 1). School leavers with or without an Abitur compete for training places, and school leavers with an Abitur displace those without an Abitur (Beicht and Walden 2018)

Objectives

Methods

Results

Conclusion