Practice Versus Theory: Is There a Competition Between Academic and Vocational Qualifications? Empirical Results From the German Labor Market

• In Event: Competition or Complementarity Between Academic and Vocational Education? Status Quo, Challenges, and Future Perspectives

Abstract

Objectives and theoretical framework

This contribution focuses on the usability of vocational and academic qualifications in the German labour market. The general assumption of the analyses is that the competition between academic education and vocational qualifications is particularly high if there are extensive similarities and/or overlaps regarding the required skills and the activities to be performed in the workplace. In contrast, a complementary relationship between both types of qualifications is more characteristic if the companies differentiate the tasks and fields of work of vocationally and academically qualified employees. Former research shows various determining factors for the extent of competition or complementarity like e.g. the industry sectors, the specific personnel structures and the engagement and strategy in the field of training.
The usability of educational qualifications in the labour market can be estimated by various aspects, such as income, employment status, position etc. Within this project, the companies and the individuals both evaluated the usability of academic and vocational qualifications in comparison. The theoretical background is formed by rational choice theory (Arrow 1989; Esser 1990) as well as the signaling (Spence 1973) and screening (Stiglitz 1975) approach. These theoretical approaches try to explain matching processes and recruiting decisions on the labour market.

Methods and data sources

The mixed methods research concept contains curricula and vacancies analyses, case studies in selected sectors and a quantitative survey. This contribution focuses on the analyses of the employment survey, which provides in depth insights on the individual perspective on labour market usability of educational qualifications. The results derive from analysing the data from the German BIBB/BAuA employment survey of 2018. We assessed employees’ educational decisions based on their returns on educational investment. From an individual perspective, the disparate labour market outcomes of employees with equivalent qualifications are compared.
To evaluate the rationality of individuals’ educational choices we calculated an OLS regression model containing variables associated with a positive effect on income like education and work experience (Mincer 1974). To gain more differentiated insights on the impact of career aspirations and educational choices we successively included variables into the model representing the individuals’ rationales as well as their socio-economic background and types of qualification (i.e. academic vs. occupational).

Results and scientific significance

The case studies and the company survey showed that vocationally qualified employees tend to hold more often operational management positions while academically qualified employees are more likely to hold strategic leadership positions (project management, HR management or controlling).
Our results show that the aspirations regarding employability and income have a positive effect on individuals’ returns on educational investments, indicating that their educational decisions are rational. Furthermore, we test the impact of educational choices employees make on a micro level as well as on a macro level (sector, company size and counselling impact). This allows us to compare selected micro and macro level factors.
The presented results contribute to the debate on the relevance of vocational qualifications in the labour market, driven by the trends of academization in different occupational fields.

Authors

• Silvia Annen, University of Bamberg

• Michael Tiemann, Federal Institute for Vocational Education and Training