School-to-Work Transition and High Performance: The German Approach. Paper No. 44.

Job training is a powerful tool for growth, but only if embedded in a climate of pro-growth policies that it complements. To attract capital to create growth and jobs, a country has to offer favorable supply side conditions. A skilled labor force is one of several important supply side categories, whose growth effects are strongest when the other supply side conditions are favorable as well. Four reasons for paying special attention to human capital are as follows: trying to be as good as the best; higher wages justified by higher productivity; capital-intensive, labor-saving, technology-intensive production processes that require highly skilled labor; and an educational continuum for those willing to work for lower wages and the academically trained high achievers and everyone in between. German vocational training is a mass apprenticeship system run by the private sector within a public-private partnership. Trainees in all sectors of the economy usually begin training right after leaving school. Youth training is the best unemployment insurance and the best weapon against youth unemployment. It works best when it is work-based, performance-oriented, structured learning. The vocational system must not foreclose the option of apprentices to go to college. Germany is currently building a new system that combines academic and practical training and fills the gap between traditional vocational training and the university--the Berufsakademie (professional academy). A variant is already practiced in Singapore. (Eleven tables are appended.) (YLB)