Vocational education and labour markets in deregulated, flexibly co-ordinated and planned societies

Abstract:

This article deals with consequences of different educational and labour market regimes for the matching of people to jobs. It differentiates between flexibly co-ordinated, planned and deregulated societies, focusing on the Federal Republic of Germany, the German Democratic Republic and the United States of America. The empirical analyses are based on the German Socio-Economic Panel (GSOEP) and the Panel Study of Income Dynamics (PSID). The analyses confirm most of the hypotheses. In all three countries, many employees have to deal with a mismatch between their qualification and the requirements of their jobs. The number of employees with a mismatch is considerably higher in the United States. However, this applies especially to young employees. In Germany, young people have a much better chance of using most of their qualifications in their first jobs, but their position in the labour market will worsen as they grow older. As expected, overqualified people earn considerably less than their colleagues who are working in adequate jobs. However, education is still worthwhile even if one is overqualified.