Is Germany and Austria’s Dual Education Model Worth Adopting?

With Germany and Austria having the lowest unemployment rates in Europe at below 8%, other countries are wondering if they should try to follow suit and adopt a dual-education system that could help maintain a stronger, more stable economy. Germany and Austria have an education model that combines formal schooling and apprenticeships, and The Economist reports that the dual-education system ties education to demand so that students always have a job to walk into after graduation.

Other European countries are struggling, with Spain’s youth unemployment rate at 56% and Italy’s at 38%.

Germany recently signed memoranda with Greece, Italy, Latvia, Portugal, Slovakia and Spain to help set up vocational-education systems. Mrs von der Leyen discussed the topic in visits to Madrid in May and to Paris this week. There is even talk of a “new deal” for Europe, including bringing youths from crisis-hit countries to work in Germany and making more loans.

The dual-education system originally started in 1969. Students who were not interested or qualified to go to university would sign up for a dual-education program, where three to four days out of the week they would work at a company that paid them and taught them relevant skills. The rest of the time they attended classes that were specialized for the field in which they worked.

The classes and apprenticeships were coordinated by the chamber of commerce and industry association. Students received certification after three years of training, and if they made a good impression on the employers who trained them, they would likely be hired full-time.

Around two-thirds of Germans matriculate from the system and enter into any of ~350 careers, including agriculture, sales and marketing, pharmacology and accounting. The program has the practical advantage of employers and employees both screening each other during the training.

However, there is still doubt about the dual-education being the main reason for success in these countries. Germany was known as the “sick man of Europe” in the 1990’s with a high unemployment rate, so the education system can’t be the only reason for its current economic state.

The country can attribute some of its success to its welfare reforms from a decade ago and the unions’ wage restraint, while the population is aging and shrinking, which has opened up more jobs for graduates.

Ludger Wössmann, an economist at the Ifo Institute in Munich, suggests that vocational education can have bad side effects. In his research, countries that combined school and work-based education (Germany, Austria, Denmark and Switzerland) did much better at getting young people into jobs. But early training can turn into a disadvantage by the age of 50. It appears that skills learnt in vocational training “become obsolete at a faster rate.” Low youth unemployment today may thus come at the cost of higher old-age unemployment tomorrow.