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VET makes the difference: job polarization in the US and Germany
Dresden University of Technology, Germany
Job polarization is a phenomenon observed in the US since the beginning of the 1980s.
Contrasting, Germany's labor market does not prove to be comparably polarized. This thesis aims to analyze why the US is more affected by the polarization of employment than Germany.
Based on an examination of both country's science and technology regimes as a requirement
for the occurrence of the substitution of middle-skilled occupations, there is evidence for intense similarity of either system. Yet, the US is focused on cutting-edge technology, while Germany concentrates on high-value manufacturing.
Rather, the reason for less job polarization in Germany is founded on the shape of its educational system. In particular, the dual apprenticeship system allows for an attainment of high-quality skills that are relevant for a variety of jobs. The US fails to train workers in abilities that are hardly to be substituted by automation.
Does ICT Affect the Demand for Vocationally Educated Workers?
Filippo PUSTERLA, Ursula RENOLD
ETH Zurich, Switzerland
This paper examines the effect of information and communication technologies (ICT) on the demand for workers in Switzerland. We compare the hypotheses that an increase in ICT leads to either upskilling or job polarization, and investigate their implications for countries with a diffuse vocational education and training (VET) system. Using data from a large employer-employee survey, we create a novel measure of ICT based on the percentage of ICT workers within firms. This measure allows us to assess the impact of ICT on the educational composition of the workforce by exploiting variation over time. We find that ICT has an upskilling effect from 1996 to 2018: ICT decreases the demand for low-skilled workers while increasing the demand for high-skilled workers, especially those with a tertiary vocational education. These results strongly suggest that VET is a valid alternative to a strictly academic education, because workers with a tertiary VET degree are as good at adjusting to technological change—and sometimes even superior to—workers with a tertiary academic education.
Updated education curricula and accelerated technology diffusion in the workplace: Micro-evidence on the race between education and technology
Tobias SCHULTHEISS, Uschi Backes-Gellner
Universität Zürich, Switzerland
In the race between education and technology, one important question is whether the updating of education curricula with technologies from the research frontier is able to bring these technologies faster into firms’ workplaces—and, if so, how much faster. To provide micro-evidence on the technology diffusion effect of curriculum updates, we use two types of text as data: vocational education curricula and firms’ job advertisements. To control for the natural spread of new technologies, we draw on long-term patent and publication data. In particular, we study technologies from an early wave of digitalization (i.e., computer-numerically controlled machinery, computer-aided design, and desktop publishing software) and examine whether adding them to vocational education curricula led to an accelerated diffusion of these technologies into firms’ workplaces, as measured by the mention of these technologies in job advertisements. Exploiting the staggered introduction of these three new technologies across various occupations as an instrument, our results show that curriculum updates substantially shorten the time until new technologies arrive in firms’ workplaces, especially for smaller firms that are far from the research frontier.
On the extent of applicant discouragement after apprenticeship contract cancellations during the Covid-19 pandemic
Bundesinstitut für Berufsbildung (BIBB), Germany
In 2020, apprenticeship demand declined beyond expectations from demographic and structural developments. This raises the question whether school leavers have been discouraged from entering apprenticeships by the pandemic. This paper investigates to what extent registered apprenticeship applicants show a decreased interest in apprenticeships after having had an apprenticeship contract or a verbal agreement about an apprenticeship contract revoked by their training firm.
The analysis uses data from the BA/BIBB survey of apprenticeship applicants by the Federal Employment Agency (BA) and the Federal Institute for Vocational Education and Training (BIBB). It is a representative survey on successful entry into an apprenticeship, the degree of occupational orientation and the resources and means to search for an apprenticeship for officially registered apprenticeship applicants. In fall of 2020, a special period of the survey was conducted to gain insight into the application phase during the Covid-19 pandemic of more than 6,000 registered applicants.
I estimate logit models of the association of a contract cancellation for pandemic-related reasons as compared to cancellations for other reasons with a decline in interest for apprenticeships. Concerning the interest in apprenticeships, I look at actual participation in apprenticeship, indicated interest of unsuccessful applicants and an assessment of respondents of the extent to which the pandemic has changed their interest in apprenticeships but also school-based VET and university programs. I am able to control for a large number of individual characteristics, which correlate with the individual market position, as well as regional characteristics of the local apprenticeship and labor market structure.
Preliminary results indicate that only applicants who had their contracts cancelled due to firm closure or firm withdrawal from training significantly more often stated to have a decreased interest in apprenticeships and at the same time an increased interest in alternative education opportunities.