Apprenticeship Training

The level of qualification of the labour force in Austria is considered to be an important positive feature of the business location. A large share of youths receive vocational qualification and the share of unskilled workers is low in Austria in comparison to other countries. Available evidence shows that the Austrian system of elementary education at compulsory school level is very good in international comparison with regard to the knowledge acquired.

In quantitative terms the system of apprenticeship training is the largest area of vocational education in the secondary phase of education in Austria. It includes slightly less than half of all people in the relevant age cohort, but has been declining in importance in the past few years. The Austrian system of vocational education covers, in addition to the training of apprentices, the broad spectrum of vocational schooling on the middle and secondary school levels. This type of education has been gaining ground in the past few decades. In comparison to other countries, Austria has a well-established system of vocational education that offers a wide variety of choices and the share of workers with completed vocational education is also high.

As apprenticeship training is seen as the main reason for low youth-unemployment in Austria, a detailed discussion follows. Apprenticeship training is part of formal education and regulated by law. Apprenticeship education and training takes place at two locations. Roughly four fifth of the apprentice's schooling takes place at the enterprise providing training and roughly one-fifth at a vocational school. The training at the enterprise is combined with the apprentice's participation in productive work. In addition to these two schooling locations, a range of options for training outside of enterprises also exists (e.g. training plants, training syndicates), but up to now these have only been taken up in specific sectors (especially construction and restaurants).

The main instrument of regulation for apprenticeship training is the apprenticeship contract that is signed by the enterprise providing training and the apprentice (or his/her legal guardian). The selection of apprentices and the availability of training openings are subject to the criteria of personnel selection of an enterprise. The apprenticeship contract is a contractual labour relationship determined within the scope of negotiations on a management and trade union level with the main parameters (such as duration, working hours, protection against dismissal, etc.) usually precisely defined. Apprentices are covered by the compulsory social insurance scheme and receive an apprenticeship compensation for productive work as fixed in collective bargaining agreements. The amount of apprenticeship compensation (in certain industries) is roughly 20% of median income in the first year of training and in the third year of training roughly 30-40% of the median income in the respective industries (OECD 1994). The establishment of an apprenticeship contract obliges the apprentice by law to attend a vocational school.

The basic standard units of apprenticeship training are the apprenticeship occupations that define the curricula of the training at enterprises. Apprenticeship occupations are created by law (by decree pursuant to the Vocational School Act) and regulations governing occupational training exist for every type of occupation (especially occupational profiles, which roughly outline the content and time frame of the training) as well as a recognised vocational qualification. The number of apprenticeship occupations is roughly 230, but the distribution of apprentices across the occupations is highly concentrated (half of all apprentices are being trained in fewer than ten occupations, 90% of apprentices are trained in less than 50 occupations). Apprenticeship training is highly segregated by gender, the concentration is slightly lower in the case of male apprentices and the occupations are different from those chosen by female apprentices. The main male occupations tend to concentrate on the productive sector, e.g., automobile mechanics, plumbing, carpentry, masonry, metalworking; the main occupations for female apprentices are in sales personnel, clerical work, hairdresser, restaurant services. The apprenticeship occupation definitions fix the length of the training, which varies between two and four years, but in most cases is around three to three and a half years. The definitions of apprenticeship occupations determine the recognised qualification that is certified by a completion exam.

The system of apprenticeship training is characterised by a very complex organisational framework with numerous competent bodies, a situation which often causes frictional losses in the further development of the system. The following bodies have major influence on apprenticeship training: the Ministry for Economic Affairs has jurisdiction at the enterprise level, the Ministry for Education and Cultural Affairs has jurisdiction regarding vocational schools, the governments of the Länder have functions covering both areas. The social partners are involved in various functions and at various levels in the system (an advisory function in the Federal Council for Vocational Education and in the Council for Vocational Education on Länder level, in collective wage bargaining, the apprenticeship offices at the Chambers of Commerce serve as official points of contact, etc.).

The system of apprenticeship training is financed mainly by enterprises providing apprenticeship training, and on the other hand, by the public sector, which covers the costs of the school education out of the federal and Länder budgets. An analysis of the costs and benefits at enterprise level involves a lot of problems. Since the enterprises are very different, an average figure does not really mean much. According to a study by Lassnigg and Steiner (1996), the majority of enterprises have net costs at the bottom line, but one-third of enterprises manage to make net earnings on apprenticeship training. These results apply in varying degrees to all occupations.

The interest of enterprises in apprenticeship training has been stagnating or even declining since the beginning of the 1990s, a fact that has been obscured for some time by a drop in the number of youths applying for apprenticeship training due to demographic changes. In the past few years, though, stronger birth years have led to a deficiency in the number of training positions available, which has triggered massive political efforts to find occupations for youths.

There are clear signs that the self-regulating process for finding enough apprenticeship training positions in the various occupations will not work as smoothly in the future as it has in the past. New research results show that apprenticeship training is being strongly affected by the structural changes in the economy. Apprenticeship training concentrates on occupations in the productive sector, most of which show a downward trend (see Lassnigg et al. 1998). Hofer and Pichelmann (1995) also indicate that after completion of the apprenticeship training many youths are confronted with significant problems in entering the labour market, a fact that is manifested by the relatively high degree of mobility associated with periods of unemployment and the switching of occupations (see Lassnigg and Schneeberger 1998).

The emerging lack of apprenticeship training positions has triggered massive short-term measures to promote apprenticeship training and to reduce the burden on the enterprises providing training by reducing costs and slackening restrictive requirements. However, the short-term goal of creating training positions has pushed the discussion on the effectiveness of measures taken to solve the medium and long-term structural problems in the background.

If the trend observed to date continues, a clear redistribution in the patterns of education levels among youths will occur in the medium to long term. Vocational schools will sooner or later replace apprenticeship training as the predominant category of education; at the same time though, the traditional distinctions of specific vocational training, which are concentrated in the productive sector, will remain. This trend has shaken up the traditional pattern of qualification, and the highly regulated system of vocational education will have great difficulties in adapting to this trend. In Austria, it is especially the mechanisms for identifying and developing new qualification profiles and training programmes that are weak and there is a strong tendency to stick to systems that have worked fine in the past.

The system of university education should also be examined as to its efficiency in the light of the quantitative expansion and attempts to reform it in the past few decades. The rate of university graduates among employed persons is still very low in international comparison and university graduates tend to seek employment in the public sector. The drop-out rate is very high and the duration of studies is very long. Enterprises in the productive sector employ relatively few university graduates. Apart from the low personnel capacity, Austria has also been "technology taker" in the past, spent little on research and technology, posted a negative technology balance of payments and had limited R&D resources, etc. International comparisons show that the rate of persons employed in R&D is not only very low in Austria, but that growth in this segment has even slowed down. All in all, the obvious conclusion is that the existing structure of the system of education, which concentrates highly on the medium-range qualifications, has probably fostered the tendency of enterprises to stand by traditional and not very innovative practices, thus indirectly dampening the dynamic of growth.

One approach of improving the system of university education in Austria has been the foundation of "Fachhochschulen" (non-university higher education institutions providing high-quality professional and academic training for specific occupations). This has created a dynamic, demand-oriented and innovative educational option that gives graduates the new qualifications needed to succeed in the future and required by major economic sectors. The purpose was also to strengthen the applied research and development sector. Up to now this sector has remained quite small in comparison to the universities and the potential for growth is restricted by limited resources.

While the system of primary education in Austria is well-established, in the area of further education a wide and somewhat intransparent range of private and semi-official institutions exists. It is undisputed that the system of further education and lifelong learning has to be promoted and expanded. However, there is not much clarity as to what value may be attached to existing programmes and what path to take in the future. The system in place to date is based, on the one hand, on the individual initiative of workers and enterprises to obtain further education, and on the other, by the qualification measures sponsored through active labour market policy programmes. The further education activities of enterprises and workers are largely voluntary and the programmes organised under the heading of active labour market policy are relatively few. Funding from public bodies is very low in absolute figures and above all in comparison to activities relating to primary education.

For a few years now, many activities have been undertaken to increase transparency in the further education market, such as the creation of a broad-based public information system, which has not yet been completed. The OECD has also recommended greater diversification in the area of further education, which is currently dominated by a few large suppliers. Furthermore, there are approaches and various proposals to create a system of incentives for further education at the level of the individual worker and at the enterprise levels, as well as cost-sharing schemes with the public sector. For example, a trial phase with education vouchers has been completed and a proposal has been put forth to create a system of time credits for workers. In accordance with the latest guidelines for European employment strategies, measures to raise the level of qualification among workers have also been proposed.

EMP/SKILLS - Skills and Employability Department