Abstract
Motivated by discussions of skill mismatches on local German vocational educational and training (VET) markets, this paper analyses how occupational segments of VET entry of individuals with lower and intermediate secondary school degree relate to local labor market characteristics. The econometric analysis applies data from a survey conducted with 9th graders within the German National Educational Panel Study (NEPS). Considering opportunity structures and the local competition for training positions, we find that the match between occupations' skill demands and individuals' abilities tends to be specifically close in diverse and competitive urban labor markets. In non-competitive peripheral labor markets, in contrast, graduates with lower school certificates seem to have a higher likelihood of entering VET in segments that are specifically attractive for graduates with upper secondary school degree. The results on the allocation of abilities and the weight of preferences under different labor market conditions have different welfare implications from an individual, regional and general economic perspective.
Highlights
Local vocational education and training (VET) within firms and schools is crucial to generate the specific skills required by employers and industries in Germany (Baethge and Wolter 2015)
The estimated coefficients are represented as average marginal effects (AME) that express the direction and strength of the relationship between explanatory variables and individuals’ likelihood of entering specific occupational segments
The hypotheses that have guided the analysis focus on the relationship between competition/labor market density, opportunity structure / labor market diversity, and relative attractiveness of different vocational educational and training (VET) entry segments at given preferences or abilities
Summary
Local vocational education and training (VET) within firms and schools is crucial to generate the specific skills required by employers and industries in Germany (Baethge and Wolter 2015). Residents’ VET choices are relevant for the maintenance and enhancement of economically valuable skills due to low in-migration. As the requirements of firms and industries vary across space, local training and career opportunities vary regionally as well. These opportunity structures can be expected to affect the occupational segment of VET entry due to residents’ restricted mobility and information. Despite the expectable adaptation of training opportunities to industry demands and of VET entry segments to training opportunities, mismatches have been observed on the occupational, regional and qualification level on Germany’s VET market
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