Friday, 20 November 2015

The impact of youth unemployment on adult employment trajectories

Dr Stefan Speckesser and Vahe Nafilyan, from the Institute for Employment Studies, look at patterns of young people's movement into and within the labour market over the last 40 years



Long-term trends and effects of the economic cycle


In a recent project for the Department for Business Innovation and Skills, we examined how the transitions of young people to and within the labour market have changed over the last four decades.[1] These changes were analysed for all people in the UK born between 1959 and 1997 with descriptions of some broad trends in the labour market and education activity using all available years of the Labour Force Survey (LFS) from 1975 until 2013.

Our video below shows how much education participation and patterns of entry to the labour markets have changed in the UK since the 1970s. It shows both the continuing trend of education expansion as well as effects of the economic cycle, resulting in varied initial labour market transitions and potential impacts on adult employment trajectories for different cohorts.





Wednesday, 28 October 2015

Apprenticeships improve employment prospects, but do they help to grow local economies?

Following the publication of the latest evidence review on the effect of apprenticeships by the What Works Centre for Local Economic Growth, Henry Overman looks at the positive effects of apprenticeships.


Given the considerable policy interest in this area, there’s already a whole set of reports and opinion pieces discussing the costs and benefits of apprenticeships. As ever, our report tries to add to our understanding by identifying evaluations that try to carefully identify the causal impact of apprenticeships – that is, what changes for workers or firms as a result of participating. In common with many of our other reviews, these evaluations represent a small subset of the large number of studies available (27 out of more than 1,250 studies met our minimum criteria).

The findings are broadly positive – at least in terms of improving employment prospects. Of the 9 studies that looked at employment, 7 found positive effects for those completing apprenticeships. This compares pretty favourably to many of the other policy areas that we have looked at. Although, interestingly, we also found these kind of success rates for (generally) shorter employment training provision providing that included an in-firm component. This raises an important question about cost-effectiveness of the two types of approaches – one which is, unfortunately, difficult to answer with the evidence available (we’ll do some further work over the next few months that tries to look at this issue). The evidence is a little less positive when it comes to the effects on wages and on encouraging further training – although even here a majority of studies usually show positive effects.

Turning from workers to firms, we found much less evidence (only a couple of studies). There is some evidence from these studies that firms participating in apprenticeships experience economic gains, such as higher productivity or profits. This fits with survey evidence, but more impact evaluations are needed – especially if expanding the number of apprenticeships is going to need firms who don’t currently offer apprenticeships to start doing so.

This lack of good quality evidence on the benefits to firms, highlights one of the big challenges for the government’s drive to increase the number of apprenticeships. Another concerns the lack of evidence on how the detailed design of apprenticeships affect employment returns, completion rates and take-up. For all the strong opinions out there, we have precious little evidence to help shape the development of future apprenticeships.

In this context, it’s worth highlighting a final point. Despite the fact that the evidence we review in our report is broadly positive, it is difficult to extrapolate from this to the effect of a large scale expansion in apprenticeships. The government points to the evidence of positive effects, while critics point to the dangers that pushing out low quality apprenticeships will dramatically lower (or even eliminate) those returns. This is one of those occasions on which both sides could be right – but we won’t know what’s actually happening unless we carefully monitor and evaluate the returns to expanded apprenticeship provision. There’s no reason why we can’t do this, as well as use variation at local level to try to answer questions about the effectiveness of different design aspects of apprenticeships. In the end, a little more boring than huge sweeping arguments about policy, but more likely to improve effectiveness in the long run.

* * *
This piece was originally posted on the What Works Centre for Local Economic Growth blog - http://www.whatworksgrowth.org/blog/apprenticeships-do-work-but-the-devil-is-in-the-detail/

Tuesday, 1 September 2015

The past and future of apprenticeship growth in England

CVER's Claudia Hupkau looks at what can be learnt from past apprenticeship growth for the government's 3 million apprenticeship target. 



With GCSE results recently out, many students are now facing the decision of whether to do A-levels or whether to opt for different types of further education, for instance an apprenticeship or a college course.  Given the recent efforts of the government to encourage firms to increase the number of apprenticeships for young people, they are set to become an ever more relevant option for those recently out of school. The government has set itself a target of 3 million new apprenticeships over this parliament.

Measures have been taken to help secure the funding of these 3 million new places via a new apprenticeship levy (see a commentary by Hilary Steedman here). How firms will be encouraged to actually create those places is a question that is yet to be answered.

Considering that over the last parliament the coalition government managed to increase apprenticeship starts from on average 221,000 places annually between the academic years 2005/06 and 2009/10 to on average 460,000 places per year between 2010/11 and 2014/15 (the original data can be found here), it is worth looking at how this growth in numbers was achieved and ask what we can learn from the past experience.


Friday, 17 July 2015

The apprenticeship levy: employers’ reluctance to contribute to apprentice training costs leaves government little choice

CVER's Hilary Steedman looks at how the UK government is tackling the issue of employers' contributions towards the cost of apprenticeship training.


In his summer budget presented to Parliament on 8 July, the Chancellor George Osborne announced the introduction of a levy on large employers that is intended to provide an employer contribution to supplement government funding for apprenticeship training.

Funds raised by the levy would provide apprenticeship employers with an electronic voucher that could be used to purchase training from recognised providers. Further details of the apprenticeship levy were then provided by the Treasury in their productivity plan.

Wednesday, 15 July 2015

UN World Youth Skills Day: Estimating the returns to apprenticeship



Steve McIntosh, from the Department of Economics at the University of Sheffield, is an applied labour economist, with a particular focus on education issues and how they relate to labour market outcomes. Here he asks why the focus on apprenticeships in the recent election, and what are their apparent benefits?


A previous post in this blog series, by Gavan Conlon, discussed the wage and employment returns to vocational education and training in general. In this new entry, we focus more specifically on apprenticeships. During the recent General Election, all of the major parties promised to prioritise apprenticeships and increase their numbers. Why was there such focus on apprenticeships? Do the apparent benefits of apprenticeships justify this attention? This is an area in which CVER researchers have previously worked extensively, and I summarise some of that previous work in this post.

The basic methodology shared by all research in this area looks at the wages and employment rates of those who complete an apprenticeship, compared to the same outcomes for a comparison group, controlling for as many other wage-deterrmining characteristics of the two groups as possible. Where different studies vary is in their choice of comparison group. Those studies that use survey data, such as the Labour Force Survey, typically compare apprentices to those who have not undertaken an apprenticeship, and whose highest qualification is one level below. For example, for advanced (level 3) apprentices, the outcomes of those with a level 2 qualification as their highest is taken as the estimate of what would have happened to the apprentices if they had not undertaken their apprenticeship. Those studies that use administrative data often compare the outcomes of those who complete an apprenticeship to those who undertake an apprenticeship but do not complete.

UN World Youth Skills Day: Enabling young people to achieve better skills and education and a more productive working life

Dr Stefan Speckesser, from the Institute for Employment Studies, celebrates UN World Youth Skills Day. He takes stock of the current situation in the UK and the EU for young people's skills and looks to the future.


Today has been designated World Youth Skills Day by the United Nations, marking the importance of fostering the acquisition of skills by young people in order to overcome youth unemployment, a global phenomenon and even more of a problem in developing countries. In the UK, we should commemorate the World Youth Skills Day and think about further institutional changes that could enable people to achieve better skills and education and a more productive working life.

In my view, this is about more than just acquiring skills for labour market entry. Education in late youth forms the main stage of human capital investment for future life trajectories and is a precondition for successful adult roles, including economic independence, family formation and, more generally, strong communities.

Young people in the labour market

The situation in the UK labour market has improved significantly in recent years, with an unemployment rate for those aged 16 and over of 5.5 per cent (February to April 2015), which was significantly lower than a year before (6.6 per cent) and only slightly above the level before the 2008/09 recession (5.2 per cent in late 2007). In the EU, only Germany has a lower unemployment rate (4.7 per cent for April 2015) at present.

Compared to this, the unemployment rate for 16 to 24 year olds continues to be much higher (16.1per cent in the months to April 2015), although we have seen a great improvement compared to its peak in late 2011 (22.5 per cent). However, the international comparison with Germany (7.2 per cent), Austria and Denmark (both 10.1 per cent for April 2015) shows that more can be done in the UK.

Clearly, the overrepresentation of young people in unemployment shows that we don't offer enough opportunities for today's young people to work and participate in prosperity. In the long-term, multiple scarring effects will influence the whole life-trajectory of today's young people and will make sure that 'the impacts of current high levels of youth unemployment will be felt by society for decades'.

Institutional change to improve young people's skills in the UK

In the UK, policy initiatives launched in the new Parliament, like the productivity plan, have a strong emphasis on skills and particularly aim to improve young people's skills. Key areas of institutional change are:

·   More young people should have good English and Maths.
·   More apprenticeships for young people and the introduction of a levy on large employers to fund new apprenticeships.
·   A system of professional and technical education offering clear routes into employment.

The impact of these initiatives will depend on successful collaboration between the key stakeholders, such as colleges and employers, on how the educational offer can be improved. We also need employers to give clear guidance to colleges and learners as to which professional standards and practice should be represented in professional and technical education. Modernised vocational qualifications, which will hopefully emerge from this institutional change, need to serve as a strong signal to employers about young people's skills and productivity. This is most crucial for people outside of apprenticeships, whose training in colleges or specialist providers has to meet industry standards in terms of technology and relevance.

There is a wide consensus that education reform and building better, stronger institutions will be the key element for helping young people to progress with skills, but I also believe that skills need to be more clearly linked to their experiences in work environments.

The crucial role of experience

In the 'Craftsman', Richard Sennett described skills as a 'trained practice' and emphasised the role of routine and practising in the work of crafting physical things, but also on forming relationships with others. His view supports the role of experience, like that expressed in the narrow translation of experience as 'Erfahrung' in German, i.e. the skill, knowledge and proficiency element of experience.

It is this element of education, which makes technical and professional education more successful in countries with Dual Apprenticeships, where it achieves better school-to-work transitions, lower youth unemployment and high returns to investment in vocational education and skills. As written in Steve McIntosh's blog in this series, this also explains the focus of all major parties on apprenticeships in the recent election and the government's recent pledge to increase apprenticeships, including a levy to fund them.

However, with a majority of young people learning towards technical qualifications outside apprenticeships, we have to make sure that 'Erfahrung' becomes a strong element of the education of young people. A recent survey of 3,000 firms by the British Chambers of Commerce (BCC) clearly shows that firms believe 'hiring a young person is a risky move due to their lack of experience, not to mention the investment of time and resource needed to train them'. Consequentially 'business people tend to favour more skilled and experienced applicants - and while they do sympathise, their primary function is to run a business, which means making business decisions'.


In conclusion, I believe we need to extend reform of skills policy beyond the focus on educational institutions, curricula, finance, standards, etc., to improve young people's opportunities for gaining practical experience more generally, regardless of whether they aim for an academic or professional education. The BCC study suggested a universal work experience programme in all secondary schools, which could be one option. Alternatively, schools could involve businesses more in the curriculum, invite more employers to school events or develop projects run in partnership with real firms. It will be important to study examples of such employer-school collaborations to further progress the improvement of skills policies for young people.

Wednesday, 1 July 2015

The divide is growing between what employers and ministers want students to study

Prof Sandra McNallyDirector of the Centre for Vocational Education Research at the London School of Economics (LSE). Sandra also leads the Education and Skills Programme at the LSE Centre for Economic Performance and is a Professor of Economics at University of Surrey. 


From this September, all pupils at secondary school will have to study English, a language, maths, science and history or geography at GCSE. This is the English Baccalaureate, or Ebacc, which education minister Nicky Morgan has insisted are core academic subjects that should be taken by all children.

The director of the Confederation of British Industry (CBI), John Cridland, does not approve: he has called for GCSEs to be phased out and replaced with an exam system that gives equal value to vocational subjects.


In defence of the government reform, it should enable young people to have a fairly broad education up to the age of 16 that does not restrict them in their future choices. It is a big change from the past when students could take a wide range of “vocational” subjects at GCSE. These were not regarded as useful for anyone except schools that wanted to boost their headline results by getting weaker students to take exams in subjects that were easier to pass. This was criticised strongly in the Wolf report in 2011 about vocational education and has since been changed.


The issue is that good general education (call it “academic” if you like) is a pre-requisite for popular courses in vocational education later on. For example, students cannot walk into a course in forensic science in a further education college without good grades in their GCSE, any more than they can be accepted on to an A-level programme. Students without an adequate chunk of general education are ill-prepared to undertake more specific vocational education, which is demanding and builds on their knowledge.



Don’t specialise too soon

A more fundamental issue is what type of educational instruction we (as a society) think it appropriate to offer students up to age 16. The requirements of the EBacc seem like a minimum for a developed country – and not unlike those in many others. They will incorporate some mastery of basic skills like literacy, numeracy and critical thinking that are valuable in the labour market and directly relevant to business.

A problem with including lots of vocational subjects as options at this age is not because vocational subjects are a poor relation to so-called “academic” subjects, but because, by definition, they are more specific and directly related to particular occupations. There’s a time and place for that – and several academic studies caution against specialising too young, such as international work by educational economists Eric Hanushek and Ludger Woessmann.


It is not true that “academic” subjects are systematically valued more highly than “vocational” subjects if one reflects on what the word “vocational” actually means – a subject geared towards work in a particular occupation. Medicine, law and engineering are subjects with huge earnings potential. The divide is rather between the “A-level to higher education” route and everything else. The non-A-levels routes are many, varied and often poorly understood.



Standing up for post-19 options

There is indeed a need to constructively engage employers and their representatives in changing the education system in the next few years. However, the need is for them to engage with the post-16 and “adult education” debate. The post-19 education budget has been slashed, and yet very little commented upon by those outside the further education sector.





Keep other options open. Engineer and apprentice via SpeedKingz/www.shutterstock.com

There is a government commitment to three million new apprenticeships over the next parliament. Yet up to now, most new apprenticeships have been created for older workers that have been in their firm for some time (and not young students straight out of school or college).

There are constant demands by employers for a more skilled workforce, yet some have reduced training themselves over the past few years and there isn’t much evidence that very many of them work directly with further education colleges or universities to improve what’s on offer.


There may well be barriers to the involvement of small- and medium-sized enterprises (most British firms) to get involved in education. It would be good to hear the CBI speak up about those barriers and more generally to draw attention to the educators outside schools and universities. If “vocational education” is to be valued as the equal of “academic education”, then further education providers should not be overlooked.

The Conversation

This article was originally published on The Conversation. Read the original article.

Wednesday, 10 June 2015

What are the benefits to vocational education and training?

Dr Gavan Conlon is a Partner at London Economics. He has an extensive understanding of economics of vocational education and training having spent the last two decades researching the area using quantitative analysis. In this blog he looks at the evidence on the economic benefits to vocational education and training, and the role for the new Centre.


One of the key research strands of the new Centre for Vocational Education Research aims at better assessing the economic benefits to vocational education and training. The existence of significant and persistent labour market benefits – in the form of higher earnings and improved employment outcomes – will at least in part incentivise individuals to undertake VET. On the Exchequer side, evidence on the return on investment – derived from enhanced taxation receipts post qualification completion – will provide confirmation on where best to allocate scarce taxpayers’ resources. This will become increasingly important given the potential reductions in expenditure faced by unprotected government departments (including the Department for Business, Innovation and Skills).  

Therefore, generating robust evidence on the size of the labour market benefits associated with VET is crucial. However, to understand who should and might pay for VET, it is also key to understand the distribution of any benefits between individuals undertaking VET and the government who predominantly fund VET in England.


What do we know already?

There is already a strong body of academic literature that has considered the earnings and employment returns to vocational education and training (see BIS (2013 (here) and BIS (2014 (here)). Using combined information from the Skills Funding Agency (VET) and HM Revenue and Customs (earnings and employment), a relatively recent analysis by Conlon and Patrignani (2013) suggests that there are strong, positive and persistent labour market returns associated with VET. As Figure 1 shows, the earning premium associated with completing VET at Level 2 stood at 2%-4% per annum in the seven years post attainment, while there was also a 3-4 percentage point increase in the probability of being employed (Figure 2).   

Figure 1: Earnings returns associated with vocational education and training

Figure 2: Employment returns associated with vocational education and training



Source: London Economics’ analysis for the Department for Business, Innovation and Skills (BIS RR 106 (here), Feb 2013). Note that the analysis compares completers versus non completers (aged between 19 and 59) using information from the Individualised Learner Record and HMRC P14 earning data. Earnings returns indicate the percentage gain in earnings compared to individuals who did not complete the qualification. Employment returns indicate the difference in employment probabilities for completers versus non completers of the qualification at the specific level.

What does this mean in terms of monetary returns?

Considering percentage improvements in labour market outcomes is clearly useful, but only tells half the story. Having undertaken an econometric analysis of the Labour Force Survey, the financial benefits to the individual and Exchequer associated with VET were estimated for a range of qualifications (see Table 1).

Table 1: Net Present Value associated with vocational education and training


Apprenticeship
City & Guilds
BTEC
NVQ
Level 2
Individual
£48,324 - £74,387
£42,618 - £70,991
£40,938 - £64,120
£24,466 - £49,814
Exchequer
£31,484 - £47,540
£26,006 - £42,289
£24,884 - £38,351
£9,065 - £23,652
Level 3
Individual
£76,990 - £117,337
£55,281 - £88,967
£44,906 - £63,801
£37,044 - £66,984
Exchequer
£55,632 - £80,661
£29,895 - £48,113
£27,552 - £38,473
£20,878 - £36,965
Source: London Economics’ analysis for the Department for Business, Innovation and Skills (BIS RR 53 (here), Sept 2011). The analysis is based on an assessment of the earnings and employment returns associated with vocational education and training using information from the Labour Force Survey. All estimates presented in 2011 prices.

This analysis suggested that there were significant financial benefits associated with VET to both the individual and the Exchequer; albeit, there was substantial variation depending on the level and the type of vocational qualification. For instance, in the case of Level 3 Apprenticeships, the analysis estimated that the financial value to the individual stood at between and £77,000 and £117,000 in today’s money terms, while the benefit to the Exchequer stood at between £56,000 and £81,000.


Job done? Not quite!

With evidence like this (and there is a lot more!), why is there any need to undertake further research on the returns to vocational education and training?

When trying to estimate the returns to VET, it is necessary to assess the labour market value associated with particular qualifications rather than simply assessing the labour market outcomes achieved by individuals in possession of the qualification. This means that it is necessary to control for as many other factors that might influence earnings and employment outcomes (such as gender, region of residence, age). Most importantly, there are a range of unobservable characteristics (such as ability and motivation) that might play a key role in determining achievement and subsequent labour market outcomes. Failure to control for these characteristics will (at least in part) wrongly attribute the positive labour market outcomes to the training (instead of the person’s innate ability or motivation).

The Centre for Vocational Education Research’s role


This is where the new CVER research centre comes in. The vision of the Centre is to improve the evidence base relating VET – for the general public, practitioners and policy makers. To achieve this, one of the key objectives is to make the best use of all the different strands of data that are available across the various government departments. Having already merged data from the Skills Funding Agency on VET, HM Revenue and Customs data on earnings and employment data; and the DWP benefit data, the opportunity now exists to also incorporate detailed information from the Department for Education’s National Pupil Database. As this data source contains information on attainment levels throughout the learner’s educational career, this will allow us to address a number of the issues relating to previously unobservable learner attributes, with the result that we will be able to better identify the economic benefit associated with VET.

This will provide a significantly better assessment of the economic returns to VET, but crucially allow the assessment of the extent to which these returns vary depending on the characteristics of learners. The end result will provide policy makers with a significantly improved evidence base for the better targeting of increasingly scarce financial resources.



Friday, 22 May 2015

Youth unemployment and education participation in the UK and Europe

Dr Stefan Speckesser is an empirical economist specialising in evaluation methodology, programme and policy impacts and the returns to investments in vocational education. He has been Principal Economist of the Institute for Employment Studies since 2010.


In this blog post, we focus on the situation of 15-19 year olds using the most recent EU micro-data available to independent researchers (from 2012). More recent data for selective indicators and a comparison of youth unemployment rates and youth unemployment ratios for the whole group of young people (15-24 year olds) can be found here.



An obvious and well-established measure for understanding the effectiveness of institutions facilitating young people’s transitions into work are youth unemployment rates[1], which relate unemployed jobseekers of a particular age range to this age group’s total labour force, that is, people either working or looking for a job. The top panel of Figure 1 shows this indicator for 15-19 year olds using consistent data from the EU Labour Force Survey. The the data reveals, the labour market for young people in the UK compares relatively favourably with most other EU Member States, although the UK’s unemployment rate is higher than in Germany, Austria or the Netherlands.

However, the comparison of unemployment rates is greatly affected by institutional differences because countries with large-scale apprenticeship systems, such as Germany and Austria, include apprentices in the total labour force. In contrast, unemployment rates are higher in many other countries, where vocational education and training (VET) is primarily college-based and these individuals are not counted as part of the labour force.

Therefore, comparing unemployment ratios, which relate total youth unemployment to the whole population of the 15-19 year olds - including those that are currently in school - , results in fewer measurement problems. Figure 1 (bottom panel) shows that the youth unemployment ratio in the UK is among the highest in Europe. In relation to the other big EU economies, Germany (unemployment ratio 2.6%), France (5.1%) and Italy (4.8%), the UK’s youth unemployment ratio is two to four times bigger. 

These findings are interesting as they suggest that countries with very different institutional designs can show similar youth unemployment ratios: Countries with employment-centred VET-systems like Germany and Austria achieve relatively low youth unemployment, but – at least for the youngest group in the labour market of the 15-19 year olds – so do countries with upper secondary vocational education in colleges like Poland and France.

Figure 1: Unemployment rates and ratios for 15-19 year olds in Europe
Notes: ** Countries with ‘Dual systems’ of vocational education and employment (incl. apprenticeships).

Source: European Labour Force Survey micro data, own calculations.

The common feature of these countries is that young people, including those not aiming for academic education, continue to participate in education for longer: In Germany, compulsory education participation ends when people turn eighteen (in most states), including apprentices’ participation in vocational education colleges. In Poland, where compulsory education also ends with eighteen years of age, young people outside general secondary schools participate in full-time (basic) vocational and technical schools for two years. In France, where mandatory schooling participation ends with sixteen years of age, post-16 participation is lower, but about 87 per cent of all 16-19 year olds participate in general and professional LycĂ©es. Compared to this, young people aiming for a non-academic route in the UK make transitions out of the education system earlier in the life and are relatively more affected by youth unemployment. 

Education and Vocational Education & Training (VET) make the difference


Obviously, education expansion itself decreases youth unemployment because it postpones labour market entry, but there is more to it than a simple effect on unemployment statistics. A body of robust evidence on the substantial benefits of investment in post-compulsory education exists, with statistically significant estimates on the percentage point improvements of young people’s employment and earnings outcomes if they achieve general and vocational qualifications – compared to the counterfactual non-achievement. As suggested by Human Capital theory, knowledge and skills remain the crucial mechanism for improving the labour market position of young people.

Moreover, continued modernisation and technological change increase the demand for higher level skills and reduce opportunities for young people to move into traditional entry jobs. In such roles young people were able to gain practical experience, initially undertaking easier tasks in the workplace while firms trained their young employees up for their own benefit. The loss of this labour market segment has resulted in both a lack of opportunities for young people and an overall shortage of skills, which affects the UK’s growth prospects. As written in Sandra’s last blog post, policy in the UK aims to make a difference by increasing the age of compulsory education participation to 17 (from 2013) and further to 18 from autumn 2015.

Increasing education participation seems to be the crucial mechanism to improve the situation of young people. The comparison of EU Labour Force Survey data in Figure 2 (top panel) shows that the UK’s position in engaging 15-19 year olds in education is one of the lowest in EU, at 79%. Education participation is almost 10 percentage points higher in France (89.9%), more than 14 percentage points higher in Germany and more than 15 percentage points higher in Poland.

When considering that the UK’s tertiary education achievement rate is 40%+ of 30-34 year olds (ten percentage points higher than in Germany, see Target Tertiary Education of Europe 2020), the statistics are evidence that the UK education system delivers very successfully education at highest levels, but offers fewer opportunities for school leavers to acquire skills and recognition for professional roles at intermediate levels than other countries.

In recent years, an important element of improving such opportunities was the reform and extension of apprenticeships and traineeships, combining employment with formal education.[2] The comparison of the UK and other EU Member States supports this strategy. Figure 2 (bottom panel) show transition to VET rates - the share of pupils who leave full-time education and move on to combining work and education. As can be seen in the chart, there are large differences across countries in terms of how much employers are involved in vocational education. Countries with “Dual systems” combining apprenticeships in firms with state-run schools providing vocational education (Germany, Austria, Netherlands, Denmark)  have a very high VET transition rates. Those with mainly classroom based systems, like France, have very little employer involvement in vocational education and consequently have a low transition to VET rate. Recall from Figure 1 (top panel) that countries with dual systems are also the countries with relatively lower youth unemployment rates. 

Figure 2: Education and training participation indicators for 15-19 year olds in Europe
Notes: Transition to VET: Those combining education and work as a % of all in full-time education who left since the previous year (based on the retrospective question of the European Labour Force Survey on individual’s status a year ago.)

** Countries with ‘Dual systems’ of vocational education and employment (incl. apprenticeships).
Source: European Labour Force Survey micro data, own calculations.

Improvements the UK, but more has to be done


While the labour market situation for young people has been improving significantly over the last years in the UK, the European comparison shows that higher youth unemployment is associated with lower post-compulsory participation in education, in particular vocational education. However, it is crucial that the courses and routes offered to young learners are of high quality if the expansion of post-16 education is to reduce youth unemployment and increase skills among the population.
We can learn a lot from other countries about how to improve education for young people and prepare them for occupational roles. There are many elements from ‘Dual systems’ in Germany and Austria combining work in firms, high quality vocational education and clear educational standards, which can help to further develop UK vocational education. 

Similar to England’s vocational education system, the Dutch system offers both mainly school-based programmes and apprenticeships, with both resulting in the same qualifications, while producing much lower youth unemployment. Poland achieves high intermediate skills levels and relatively low youth unemployment with a primarily college-based system. 

In the medium term, the UK will not be able to move to a system where most of Vocational and Further Education consists in apprenticeships, even though the recent calls for more apprenticeships by all parties suggest a desire by policy makers for this to happen. We must ensure that the alternatives for those not able to get an apprenticeship are of a high standard and lead to similarly desirable qualifications. 

CVER’s aim is to produce robust evidence to further understand the impact of vocational education on students’ transition to jobs and earnings later in life. This research will help inform the policy debate on education and labour market integration of young people.

This analysis is part of a report on “Performance and Key Drivers of Youth Labour Markets in Europe” for research on “Strategic Transitions for Youth Labour in Europe (STYLE)”, funded by the European Union’s Seventh Framework Programme. The project aims to provide a comprehensive understanding of the causes of very high unemployment among young people and to assess the effectiveness of labour market policies designed to mitigate this phenomenon. The forthcoming research report will be published here.

[1] Unemployment is defined according to ILO convention and covers all young people, who are out of work, have been looking actively for work in the last four weeks and are available to start working in the two weeks or who found work and will start within the next two weeks. Unemployment rates express total number of unemployed as a percentage of the economically active population (i.e. people in employment or ILO-unemployed) of the age group in focus. Unemployment ratios relate total 15-19 ILO-unemployment to the whole population of the15-19 year olds.


[2] Since we do not have EU-wide data on apprenticeships, we focus in this description on 15-19 year olds leaving full-time education to start employment combined with education participation as a percentage of all young people leaving full-time education.