Training, Earnings and Mobility in Germany

An increase in youth unemployment and a bi-modal wage distribution in the United States have generated interest in the structure and performance of alternative labour markets. In particular, comparatively satisfactory outcomes in the German labour market are said to have been determined by the interplay of the educational system and a number of training programmes. This paper examines the performance of the German labour market measured along two dimensions: earnings and mobility. Thereby, it assesses the relative merits of different training choices as distinguished by duration and specificity of the human capital acquired. Having established the extent to which the various training programmes affect labour mobility, the paper provides additional evidence on the magnitude of wage differentials and the sources of earnings growth.