A Flood Tide of University Graduates in Germany? Declining Birth-Rates Require Increasing Share of Academics

More and more young people are rushing to attend university. Friedhelm Pfeiffer, an educational economist at ZEW, explains whether this is the right path for Germany and how company-based vocational training can be made more attractive.

Friedhelm Pfeiffer is senior researcher and the contact person for education economics at the Centre for European Economic Research (ZEW). Furthermore he is a lecturer at the University of Mannheim, Department of Economics. Friedhelm Pfeiffer studies the causes and consequences of investments in education for individual and economic development and evaluates active labour market and educational policies. As a member of the Mannheim Advisory Council on Education, Pfeiffer advises the city of Mannheim on educational matters. In addition, he is a member of the Economics of Education Committee of the Verein für Socialpolitik.

Over 50 per cent of today’s high school graduates go to university rather than pursue vocational training. Does the German labour market need so many university graduates? 

For now the demand is there. Thanks to a vibrant economy, job prospects and salaries for university graduates in Germany are excellent. Manual labour and simple to mid-level routine tasks are increasingly being performed by smart machines, whose development benefits considerably from creativity, good programming skills and a broad-based university education.

Even if the share of university students is higher than ever before, one shouldn’t forget that the number of graduates has undergone only moderate growth due to falling birth rates since the 1990s. The important thing is that young people’s access to university education remain independent of their parents’ purse.

Given the high share of university graduates abroad, German politicians made it their goal several years ago to encourage more young people to obtain university educations. But does it make sense for Germany to align its education policy with trends from abroad, where company-based vocation training is rare?

It certainly makes sense to get an outside view, but it can’t take the place of independent thought and action. Germany has an advanced educational system, and it is one of the most diversified in the world when you consider its university and dual vocational training programs. The coordination of the educational system and the economy is very good to excellent. One shouldn’t start making unilateral changes. The important thing is to improve the educational system as a whole.

Due to sinking birth rates and the increasing level of technology required by goods and products, university educated professionals with German language skills are more and more in demand. Since immigration is more difficult for university graduates than for other occupational groups (mainly due to language barriers), the policy of encouraging more young people to attend university seems on the right track. But young people have to decide themselves what they want.

Dual vocational training, which combines theory with practice, school with work, is a successful model that has made Germany strong. Why do fewer and fewer people seem to appreciate vocational training?

Dual vocational training appears to be a successful model indeed, but it also has some hitches. Even if almost 50 per cent of high school graduates receive vocational training outside the university, the traditional dual system faces growing pressure from the digital revolution, the increasing number of people attending university and the development of smart machines.

Those who have computer programming skills can get a job anywhere in Germany’s economy. The dual vocational system must make greater efforts to remain attractive in view of the on-going digital momentum. A young person today is looking for a career that can span 40 years or more, not just the next five.

In Germany there’s a shortage of well-trained professionals, especially in skilled crafts and trades, but also in industrial and healthcare professions. What can be done to interest young people for jobs that require training in these areas?

Educational policy should consider introducing bachelor degree programs for professions with enough future potential. This won’t work for all professions, but it will work for challenging fields that are high in demand, such as those in the chemical, metal or electronics industries, as well as those in the credit services sector and the information economy. This would allow participants undergoing dual vocational training to acquire a bachelor’s degree in addition to the traditional apprenticeship. For high-value apprenticeships, a bachelor’s degree makes sense given the nature of the curricula. This type of measure should make vocational training more attractive.