Apprenticeships: Managing the Skills Mismatch

bridges vol. 32, December 2011 / Feature Articles

By Barbara Posch

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Highly skilled and well-trained workforces are as important for an economy's competitiveness as are well-educated and excellent innovators. Austria and the US follow different approaches to training and educating those skilled workers. The following article tries to give a brief overview of vocational-training systems in Austria and the US, with a special focus on the Austrian dual (education and on-the-job training) system of apprenticeships.

Early unemployment hampers the career

When the financial crisis hit the real economy, many jobs in the production and manufacturing sector were lost. During the last decade (2000-2008) about 32 percent of jobs in the US manufacturing sector have been lost. This means not only putting people out of their jobs but simultaneously leaving young adults with no opportunities for employment in the first place.

Data collected and analyzed by the Organization for Economic Cooperation and Development (OECD) show significant worsening of the youth unemployment rate in the US: Between 2007 and 2010 it rose by 7.4 percentage points, hitting a peak in October 2009 with an unemployment rate of 27.6 percent among 16- to 19-year-olds. The most recent data provided by the Bureau of Labor Statistics show a slight decline of youth unemployment (age group: 16-24) during the Summer of 2011 (summer is generally a season of higher employment), compared to the same period in 2010. Nevertheless, those figures indicate underlying structural problems (e.g., trade imbalance, low worker mobility, lack of a skilled workforce), which are accelerated by the financial and economic crisis.

Recent OECD Studies prove that the initial experiences of young people in the job market influence their whole working life - especially dealing with first rejections and failure. The effects of unemployment very early in a career are therefore severe, not only on a personal but also on a socioeconomic level (e.g., long-term difficulty finding employment). The OECD recommends that their members introduce early intervention programs and effective job-search assistance for different groups of youth, strengthen apprenticeship and dual vocational training programs, and encourage companies to hire youth.

When comparing the unemployment data of various OECD countries, one can observe that countries with a fairly similar type of education system such as Austria, Germany, and Switzerland perform better than their peers; that is, they have a significantly lower rate of youth unemployment (see chart below). In these countries, the diversification of secondary education into two four-year periods enables a vocational focus on education, which not only depends on the type of school but also on the choice of taking up an apprenticeship. This education model produces a highly sought-after, well-trained, and skilled workforce for a high-quality and efficient production and manufacturing sector. At the same time, it maintains a relatively low unemployment rate among youth.

youth unemployment rate 2011
Youth (ages 15-24) unemployment rates in selected OECD countries in 2010.
The average youth unemployment rate in the EU was 21%, with a range from about 8% (Austria, the Netherlands) to around 40% (Spain). Three EU Member States (Austria, Germany, the Netherlands) and two European Countries (EFTA Members Switzerland, Norway) have a youth unemployment rate under 10%, as do Mexico (9.5%), Korea (9.8%), and Japan (9.2%). With a youth unemployment rate of 18.4%, the US is slightly above the OECD average of 16.7%.
Source: Organization for Economic Cooperation and Development (OECD), Employment and Labour Markets: Youth unemployment rate














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