Korva is a scroll of the internet’s best ideas.
Apprenticeships fell as funding rose
Weak Incentives
Care, farming, hospitality, and construction are physically demanding, low paid, and marked by irregular working patterns and limited progression. The incentives for young people simply aren't strong enough. Most would rather stay unemployed and keep applying for jobs in more favorable sectors than take a funded apprenticeship in a sector desperate for workers.
The University Route
Others go to university, which still attracts the majority. It costs tens of thousands of pounds in debt, graduates are well known to be oversupplied, and the lifetime income premium for this route is declining. The result is allocative inefficiency in the labor market.
The Youth Guarantee
The government has introduced a youth guarantee: more funding for apprenticeships, entry-level jobs, work placements, and sector-specific training pipelines meant to move young people not in education, employment, or training into work.
How does Germany's apprenticeship system work?
Germany's dual system combines paid training at a company with classroom time at a vocational school. Apprenticeships last from two to three and a half years and cover several hundred recognized trades. Employers and chambers of commerce help set the standards, so the qualification is understood across the country. Germany's youth unemployment rate has long been among the lowest in Europe, and the apprenticeship system is often cited in explanations.
Why has the graduate pay premium declined?
The premium reflects how scarce graduates are relative to the jobs that need a degree. In 1999, Prime Minister Tony Blair set a target of sending half of young people into higher education, and participation rose sharply. When the supply of graduates grows faster than the supply of graduate-level jobs, the extra pay for a degree shrinks. Some graduates end up in jobs that do not require a degree, which economists call overeducation.
How did Europe's youth guarantee begin?
Nordic countries ran versions of a youth guarantee in the 1980s and 1990s, promising young jobseekers a job, training, or education within a set period. In 2013 the European Union adopted a Council recommendation that all member states offer young people under 25 a good-quality job, apprenticeship, traineeship, or continued education within four months of leaving school or becoming unemployed. The scheme was a response to youth unemployment above 20 percent across the EU after the financial crisis. The EU later extended the offer to people up to age 29.