Saturday, February 8, 2014

Cowen on declining German apprenticeships


Young Germans are increasingly going to a university rather than entering an apprenticeship. The article Cowen links to offers some reasons why:
"The reasons for the falling number of apprentices are hotly debated. Partly it reflects demographic trends: there are fewer young people around today than when the baby boomer generation came of age. Studying for an undergraduate degree has become more attractive, in part because it no longer takes so long. German students can obtain a bachelor’s degree in just three years, instead of five years for the old-style diploma. Almost 500,000 Germans began a university degree last year, compared with fewer than 360,000 a decade ago. Nevertheless, around one-quarter of German students break off their studies prematurely and do not graduate at all. Meanwhile, trade unions accuse cost-conscious companies of offering an insufficient number of apprenticeships, and point to an increase last year in the number of young people who were unable to find one."
He concludes with: "The Germans can’t quite seem to extend a model that everyone else is falling in love with and trying to copy…".

Apprenticeship is extensive in Germany and Switzerland already. I'm not quite sure there's cause to second guess the system if people seem to be responding to reasonable incentives in their choice between apprenticeship and college. To say that apprenticeship is an important training model in a modern economy is quite different from saying that it will be the most important or will always grow.

The real problems - for apprenticeship or traditional formal education - seem to me to be establishing the institutions and coordinating the collective action to provide training of any variety for people to choose from in response to market signals. A liberal college education may be hard to get off the ground because of the positive externalities it offers. Apprenticeships may be hard to get off the ground for Becker type reasons and perhaps due to a lack of recognition of credentials not offered in a formal setting. These are the sorts of obstacles to think about and worry about. If we can overcome these obstacles and thereby provide a suite of choices to students, the fluctuations between different degrees and different forms of education don't seem to merit concern. We expect that to fluctuate. Developing the institutions to provide the opportunities in the first place can be a bigger challenge.


  1. "A liberal college education may be hard to get off the ground because of the positive externalities it offers."

    What do you mean?

    1. Living in a society of liberally minded people benefits everyone living in that society. Skills needed directly on the job aren't always provided by these educations so in many ways students are incurring a cost to generate that sort of social capital. There's certainly consumption value to them, and the social capital does buy access to certain social circles which is often a big part of why they do it. But we can easily see how there might be positive externalities as well.

      To the extent that four year degrees do provide job skills (and I do think they provide these), agglomeration economies often associated with these specialized skills are going to be closely related to how we think about the externalities around the supply of skills too.

      Skills sets provided by vocational training and apprenticeship is probably less likely to provide that sort of social capital and since a big chunk of this is occupations like electricians and plumbing (not exclusively of course) there's probably not much in the way of agglomeration economies either.


All anonymous comments will be deleted. Consistent pseudonyms are fine.