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Vocational training and the labour market

in liberal and coordinated economies


Gerhard Bosch and Jean Charest
ABSTRACT
In recent decades, the differences between the education and training systems in the
liberal and coordinated market economies have increased. It is not possible to under-
stand such different developments by focusing exclusively on the internal dynamics of
vocational and general education systems. Vocational education and training (VET),
and particularly apprenticeship systems rather than school-based VET, are deeply
embedded in the different national production, labour market, industrial relations
and status systems. In order to contribute to a better understanding of the dynamics
of VET, we examine recent developments in general and vocational training and its
links to the labour and product market in ve contrasting countries, namely,
Denmark, Canada, Germany, Korea and the USA. In particular, differences in
industrial relations, welfare states, income distribution and product markets are the
main reason for the persistent high level of diversity in vocational training systems.
The difference can perhaps be summarized as follows: in the coordinated market
economies, the modernisation of vocational training is seen as a contribution to
innovation in the economy, while in liberal market economies, it is seen as a siding
into which weaker pupils can conveniently be shunted.
INTRODUCTION
In the early 1950s, only a minority of young people in the developed countries went to
university. The vast majority acquired a basic education in school and then went on,
in numbers that varied from country to country, directly into the labour market or
into vocational training, whether in apprenticeship systems or vocational schools of
one kind or another. This vocational training enabled many young people from
working-class backgrounds to move into relatively well-paid occupations with high
social prestige. Besides their direct vocational orientation, one important character-
istic of the apprenticeship systemwas that the linking of work and study often allowed
trade unions and employers to exert considerable inuence over the system. Working
alone, together or in conjunction with governments, they developed training pro-
grammes, organised work-based learning, persuaded employers to offer apprentice-
Gerhard Bosch is at the University of Duisburg-Essen and Institute Work and Skills, IAQ, Germany,
and Jean Charest is at the University of Montreal and CRIMT, Canada. Correspondence should be
addressed to Gerhard Bosch, Institut Arbeit und Qualikation, Universitt Duisberg-Essen, 45117 Essen,
Germany; email: gerhard.bosch@uni-due.de
Industrial Relations Journal 39:5, 428447
ISSN 0019-8692
2008 The Author(s)
Journal compilation 2008 Blackwell Publishing Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main St.,
Malden, MA 02148, USA.
ship contracts and controlled their implementation as well as, to some extent, access
to the labour market. Myriad studies have shown that students with low-level general
educational attainment have more stable employment and more orderly work careers
in countries with regularised combinations of work and schooling with differentiated
occupation-related credentials than in countries with very general credentials
(Kerckhoff, 1995; Mller and Gangl, 2003; Shavit and Mller, 2000).
Unlike general education, vocational education and training (VET) is not usually
organised as a homogeneous system. VET may be provided by a wide range of
training institutions including state, non-governmental and private providers, each
with differing interests, administrative structure and traditions. Public formal VET
often overlaps awkwardly with the school and tertiary education systems, and
Ministers of Education often share responsibility for VET policy with Ministries
of Labour and/or Employment or others (UNEVOC, 2006: 1). In some cases, for
example, the apprenticeship systems in the USAor in Canada or rm-specic training
of young people, there are no institutionalised links with the general education system
and the responsibility for the training lies completely with the social partners or the
rm. The state may, however, still inuence the willingness of companies to train by
putting in place labour or product market regulations, such as licensing, levy systems
or quality standards.
It seems that the differences in the vocational training and education systems
between the developed countries are far more pronounced today than just after the
Second World War. It has almost been forgotten that the USA, Canada, Australia
and the UK, for example, had highly developed apprenticeship systems (see e.g.
Marsden, 1995; Thelen, 2004). In Germany, the dominant role of the dual system of
vocational training is a quite recent phenomenon. Up to the 1960s, the share of
employees with a vocational certicate was only about 20 per cent (1964); it sub-
sequently increased as a result of the expansion of the dual system of vocational
training to a peak of about 60 per cent in the late 1980s, where it remains today
(Geiler, 2002: 339).
Inthe last 40 years, this diversity has increased. Inthe liberal market economies of the
English-speaking world, traditional apprenticeship systems have declined in signi-
cance. Apprenticeshipsystems were very dependent oncooperationbetweenemployers
and trade unions and on state regulations. Particularly in countries with a long-
established tradition of craft unionism, they were regarded as bastions of trade union
power and as such aroused hostility among employers and conservative governments.
They shrank as union-free areas became more widespread and coverage by collective
agreements declined. The deregulation of product markets led to the abolition of many
of the institutional mechanisms that used to stabilise vocational training. This policy of
deregulation mainly affected intermediate-level vocational training. Graduate occupa-
tions (bachelor level and above) remain equally or even better demarcated and pro-
tected than those for vocational training. In some instances, classic craft unionismhas
shifted up a level and nowoccurs in newformssometimes in craft unions, sometimes
in professional lobby organisationsamong the liberal professions, such as nurses and
teachers. At the same time, there has been an unprecedented expansion of general
education at upper secondary and tertiary level, which has given employers the option
of recruiting young people with good general skills and training themin the workplace
in order to equip them with intermediate skills.
Only in countries with strong trade unions and a tradition of corporatist coopera-
tion (Germany, Austria, Switzerland, Denmark and Norway) have new apprentice-
429 Vocational training and the labour market
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
ship programmes been successfully established in manufacturing industry as well as in
the service sector. The baseline for vocational training has been raised. Vocational
training at lower secondary level has been phased out and has moved to the upper
secondary level with higher shares of general education and improved opportunities
for continuing education. With the expansion of upper secondary education, these
countries have tried to strengthen the links between general and vocational training.
Their vocational training systems have not declined in signicance to the same extent
and, from an international perspective, seem almost like exotic blooms. This is all the
more true since not only highly developed countries but also up-and-coming former
developing countries, such as Korea and the Central and Eastern European countries,
have adopted development strategies based largely on general secondary and tertiary
education. In many cases, the weakness of their employers associations and trade
unions leave them with little choice but to rely on statist strategies.
It is not possible to understand such different developments by focusing exclusively
on the internal dynamics of vocational and general education systems. VET, and
particularly apprenticeship systems rather than school-based VET, are deeply embed-
ded in the different national production, labour market, industrial relations and
status systems. The actual mix of institutions providing VET in a country reects the
interests and strengths of the various actors and the historical compromises they have
reached. VET systems are far more sensitive to changes in product and labour
markets and to the strength and relations of unions and employers organisations
than general education systems. The esteem for VET reects the esteem and status
accorded to intermediate skills in the labour market. The main difference between
vocational training and higher education lies not in the preparation for particular
occupations but in the formers lowlier position and status in national education and
training systems. The common understanding in most countries is that the purpose of
vocational training is to impart the intermediate skills required in occupations for
which tertiary education is not required. Often a less neutral language is used, with
VET being described as offering pathways for academically weaker students. VET
certainly enjoys higher esteem in countries in which it opens up access to well-paid
jobs with complex tasks and good career opportunities than in countries with
polarised job structures and high shares of low-skill, low-paid jobs, offering fewcareer
opportunities. Thus, the signals vocational certicates give to employers might differ
fromcountry to country. In some countries, they might signal competency to perform
complex tasks autonomously in a broad occupational eld; in others, however, they
might signal that the holder is a low achiever in the school system and possesses only
narrowly based skills for specic jobs.
Anumber of studies have focused on the complex interactions between the training,
education, labour market and industrial relations systems in order to explain changes
in VET. For instance, several studies have pointed to the importance of the role
played by the social partners (CEDEFOP, 2000; Crouch et al., 1999; Culpepper, 2001;
Gasskov, 1998; ILO, 1998; Streeck, 1993). They seem to provide the intermediate
structures and institutional mechanisms required to link vocational training with the
labour market. These linkages make vocational training attractive to employers and
potential apprentices, as well as to training institutions. As part of comparative
studies of vocational training systems, typologies of VET systems have been
developed. For instance, Lynch (1994) groups countries according to the institutional
principles around which their training systems are organised (apprenticeship system,
company training, government-led training, training levies, school-based training,
430 Gerhard Bosch and Jean Charest
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
etc.). In particular, she notes the lack of vocational training in countries that rely more
on market principles, particularly with regard to less-skilled workers and small and
medium-sized rms. Other typologies are based on a dualistic approach to capitalism
in which national economies are described as liberal market or coordinated market
economies (Estevez-Abe et al., 2001; Hall and Soskice, 2001; Iversen and Stephens,
2008). Crouch et al. (1999) analyse VET systems in seven countries characterised by
different forms of capitalism based on broad types of institutions, namely: states,
interest associations, local business networks, and certain kinds of rm (p. 8).
Typologies are helpful in understanding how specic institutional settings inuence
the behaviour of the social actors involved in vocational training. They also help us to
understand which institutions are crucial in guaranteeing the stability of the different
systems.
Owing to their functionalist perspective, however, typologies are per se static and
cannot explain the dynamics of the different systems. Thus, the studies by Ashton and
Green (1996) and Thelen (2004) are more pertinent to our own investigation of
changes in the vocational and training system within the wider context of changes in
society. They both emphasise the importance of history in understanding the main
characteristics and specicities of contemporary systems seen as a product of social
actors. In particular, Thelen develops this idea by suggesting an analysis of (. . .)
institutional change through ongoing political negotiation in her historical perspec-
tive about the political economy of skills (ibid.: 35). A similar dynamic perspective is
proposed by Ashton and Green (1996). They conclude that It is evident that some
models are more successful than others in attracting higher participation of young
people in education or training (p. 13). Their idea that education and training systems
are characterised by potential conict between the social actors (ibid.: 36) and that a
workable consensus has to be achieved if a particular system is to take a high-skills
route is close to our understanding of such dynamics.
The consequences of the decline of vocational training systems in the liberal market
economies are now evident. Many companies in such economies are now complaining
of shortages of vocationally qualied labour. What is missing, between a growing
share of university graduates with their largely theoretical training and a high share of
workers without any training, is the intermediate tier of trained workers with both
practical and theoretical skills. Many governments are trying to raise the status of
vocational training. New apprenticeship systems are being established in Australia,
the UK or Canada, school-based vocational training is being expanded and, in those
countries with weak vocational training systems, the universities are reacting to rms
needs by increasing their provision of courses with a strong vocational content.
At the same time, some coordinated market economies are struggling to mod-
ernise their vocational training systems. Moreover, following the deregulation of
product markets and the introduction of shareholder-value strategies, which tend to
maximise short-run prots, it is apparently becoming increasingly difcult to main-
tain the cooperation between employers organisations and unions in vocational
training systems, the benets of which become evident only in the long term. In
addition, there is a risk that the uncoordinated expansion of tertiary education into
areas previously occupied by vocational training systems will deprive the social part-
ners of purpose in this area. Companies have always hesitated to invest in longer
vocational training courses that impart transferable skills because of their fear of
poaching. If the state steps in and offers school-based vocational training, it will easily
crowd out vocational training provided by companies. Employers will, therefore,
431 Vocational training and the labour market
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
have less control over the content of training and might lose interest in developing and
continuously modernising curricula.
After a long period of increasing diversity between training and education systems,
are the parallel trends towards greater investment in vocational training in the liberal
market economies and the expansion of general education in the coordinated market
economies nowleading togreater convergence? Some scholars argue that the structural
shift towards services could produce greater convergence because services require less
technical knowledge and more general skills (Castells, 1996: 238). In order to contrib-
ute to a better understanding of the dynamics of VET, we examine recent developments
in general and vocational training and its links to the labour and product market in ve
contrasting countries, namely, Denmark, Canada, Germany, Korea and the USA.
1
High shares of young people in these ve countries graduate from high school (upper
secondary school). The main difference between these countries lies not in the level of
upper secondary education but in its distribution between general and vocational
programmes. A much higher share of young people in Germany and Denmark go
through vocational programmes than in Korea. Vocational programmes play only a
marginal role in the USA and Canada. It should be noted, however, that most
apprenticeship programmes in these countries are not integrated into the public
education system and are therefore not included in the public statistics. Thus, voca-
tional programmes might actually be more extensive than is shown by the statistics. A
second major difference between the countries is to be found in tertiary education.
Germany is the only country in which the 2534 age group has a lower share of
university graduates than the 5464 age group. Together with Denmark, it invests less
than the three other countries in tertiary education. (See Table 1.)
1
Our analysis is based on a research project in which the vocational training systems in 10 countries (AUS,
CAN, DE, DK, FR, USA, UK, Morocco, South Korea and Mexico) were compared with each other. The
project was supported by the Alexander von Humboldt Foundation, the IAQ and CRIMT. In this article,
we draw from the country chapters on DK, DE, CAN, USA and Korea. The results of the whole project
will be published in Bosch and Charest (2008).
Table 1: Education and training indicators in ve countries
Country
Population with completed upper
secondary education 2005
Share of university
graduates 2005
Public and
private
expenditure on
education in %
of GDP 2004
Age
Share of
vocational
programmes
Age
Total
Tertiary
education 2534 5564 Difference 2534 5564 Difference
Germany 84 79 +5 60 22 23 -1 5.2 1.1
Denmark 87 75 +12 48 40 27 +13 7.2 1.8
Canada 91 75 +16 (5)** 54 36 +18 5.9* 2.3*
USA 87 86 +1 (5)** 39 37 +2 7.4 2.9
Korea 97 35 +62 29 51 10 +41 7.2 2.3
Source: OECD (2007: 3638, 205, 277).
*2000.
**Estimation from participation at ISCED 3c.
432 Gerhard Bosch and Jean Charest
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
We begin by looking at two countries that have undertaken the difcult task of
modernising their apprenticeship systems (D, DK) (see the section The dual systemof
vocational training in Germany and Denmark). We then turn our attention to the
USA and Canada, both of which allowed their VET systems to decline in the past (see
the section The USAand Canada: vocational training in a liberal economic context).
In the section The government-led vocational training system in South Korea, we
analyse one of the up-and-coming industrialised countries, namely South Korea,
which seems to be switching gradually from a mixed system with high shares of VET
to one in which VET is being marginalised. In the Conclusions section, we discuss
the question of convergence and divergence, the main drivers for change in the
respective countries and the adequacy of the existing typologies to characterise these
changes.
THE DUAL SYSTEM OF VOCATIONAL TRAINING IN
GERMANY AND DENMARK
In Denmark, today approximately one-third of school leavers goes into the dual
system of vocational training. In Germany, about two-thirds opt for vocational
training of some kind; of these, three-quarters go into the dual systemand one-quarter
into school-based training. There are strong similarities between the two countries
vocational training systems, as well as some signicant differences. Both countries
base their system on the notion of occupation. The end goal of the training process is
competency in a broadly dened occupational area; this competency is acquired in a
three- to four-year course of training. The training process is not divided up into
individual modules because this would compromise the broad occupational base of
the training and its recognition in the labour market. Admission to a vocational
training programme is dependent on the conclusion of a training contract with a
company. Learning in the workplace is combined with theoretical study in vocational
schools.
The decisive factor in establishing and maintaining the close linkage between the
training system and the labour market is the participation of the social partners. In
both Germany and Denmark, employers and trade unions work together, with gov-
ernment support, to develop occupational proles for initial and upgrading training
programmes. This facilitates both the recognition of training certicates in the labour
market and their embeddedness in the wage systems. Most graduates from the dual
system work in the occupational eld for which they were trained or in a related
occupational eld. The relatively low wage differentiation in both countries reduces
the returns for tertiary education and keeps the dual system attractive to both parents
and young people. Middle-management positions are usually lled by workers who
have completed an upgrading training course. It is true that there are differences of
opinion between the social partners about the content of vocational training, the
payment of trainees and other issues. However, vocational training is not linked to
trade union job control. Trade union power in both countries is not concentrated
in craft unions but in strong national industry unions (Germany) or federations
(Denmark) representing the interests of different occupations as well as of unskilled
and semi-skilled workers. Unions do not try to monopolise labour markets by seeking
to establish lines of demarcation between the various occupations and instead
promote teamwork between different trades. This prevents vocational training from
being an arena for disputes between the social partners about basic principles.
433 Vocational training and the labour market
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
Every occupational training system outlives its usefulness in periods of rapid struc-
tural change if it does not adapt to that change. Dual systems with centrally dened
occupations constitute a highly regulated training system. In times of rapid change,
they must be re-regulated if they are not to be eroded. Consequently, the survival of
the German and Danish vocational training systems depends strongly on the inno-
vative capacity of the unions and employers to continually modernise the system. The
vocational training systems in both countries went through periods of crisis before the
social partners, with state support, developed such capacities. In the most recent
reforms, new service occupations (e.g. IT occupations) have been dened in order to
extend the scope of the system to new occupational elds. The old occupational
proles have been modernised, mainly by merging related, highly specialised
occupations. In Germany, for example, 45 metalworking occupations were reduced to
16 in 1987 and then, in 2005, these 16 occupations were merged to form ve basic
occupations with about 50 per cent overlap in the curricula to facilitate teamwork,
cooperation, further learning and mobility. Teaching methods have changed consid-
erably in recent years in response to changes in work organisation (Bosch, 2000). In
the past, work organisation systems were based on a functional and hierarchical
division of labour. These systems were mirrored in the subject-based training
curricula. In modern work organisation systems, the various occupations, learning
and working in teams, coordinate their activities on a decentralised basis. Thus, the
training model that prevails today is based on work in teams to which responsibility
has been devolved. Consequently, the focus is on team-based learning and project
work; this also enables trainees to acquire the soft skills they need and means that
training can be concentrated at an early stage on the competences trainees will require
subsequently during their working lives.
One of the biggest challenges for the social partners is to implement new occupa-
tions and training methods at workplace level. Companies with traditional work
organisation systems have to change not only their training methods but also their
work organisation. Moreover, wage systems have to be adjusted. One of the major
reforms put in place by the social partners in the German engineering industry, for
example, was the introduction of joint pay scales that abolish the traditional distinc-
tion between white- and blue-collar workers and encourage at organisational struc-
tures and teamwork. Denmark and the other Scandinavian countries also encourage
at structures and teamwork with their solidaristic wage policy, which reduces wage
differentials between different groups of employees.
In both countries, the dual system has kept pace with structural change but is
facing new problems. Vocational training is increasingly regarded as a cul-de-sac
that offers few opportunities for further study in the general education system. As
a result, it is frequently the academically weaker youngsters who go into the dual
system. In both countries, attempts are being made to make the dual system more
attractive and also to provide transitions into higher education. In both countries,
the share of general education in vocational schools has been increased. This has
generally not been at the expense of occupation-specic training because this
requires more mathematical, language and soft skills than in the past. The oppor-
tunities for further training have been increased. In both countries, initial training
is combined with opportunities for further vocational training for master craftsmen
and technicians, or the service-sector equivalents. In Germany, for example, 12 per
cent of all those who gain an initial qualication in the dual system subsequently
take part in upgrading training programmes. Additional qualications above this
434 Gerhard Bosch and Jean Charest
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
level have been developed. In most German Lnder, the master craftsmen certicate
has, since the mid-1990s, entitled a young person to study at the universities of
applied sciences (Fachhochschulen). In both countries, there are now opportunities
for holders of a journeymans certicate to return to the education system in order
to acquire the Abitur (high-school diploma). The problem is that the transition is
time-consuming because students cannot acquire credit points in vocational training
which count at university level. In Germany, an increasing proportion of appren-
tices with the Abitur go through a so-called dual study programme, which means
they have a training contract with a company and study at the same time. There are
now more than 300 such programmes and most big companies are looking to such
programmes, which are a hybrid between vocational training and tertiary educa-
tion, to recruit some of their future middle managers.
Furthermore, rms willingness to provide training is fragile and strongly dependent
on the economic cycle. In economic downturns, there is usually a decline in the number
of apprentices because rms needing to reduce costs usually target training rst. The
German dual system went through such a crisis following the collapse of the East
German economy and the lengthy economic crisis that affected the whole of Germany
after unication (Bosch and Weinkopf, 2008). It is still unclear whether there are
additional structural reasons for this increasing reluctance to offer training. It is argued
that the greater competitive pressures generated by the deregulation of product
markets following implementation of EUregulatory policies and the increasing short-
termism associated with the adoption of shareholder-value strategies might inuence
rms investment in initial vocational training. However, the specialisation of the two
high-wage countries in high-value-added services and products might work in the
opposite direction. In addition, it should not be forgotten that graduates of the dual
systemare less well-paidthanuniversity graduates, whichmight helptokeepthe system
attractive to employers. There are case studies showing a reduction in training follow-
ing deregulation (e.g. the privatisation of public utilities), but there is still a lack of
representative studies of the impact of these changes in product markets on training.
Besides these commonalities, there are also some pronounced differences between
Denmark and Germany. Education and training policy in Denmark has been more
strongly social democratic in nature than it is in Germany. The distinction between
vocational training and general education, as well as that between the various types of
school in the lower secondary stage of education, was regarded in Denmark as a
source of social inequality. As a consequence, Danish social democrats planned to
integrate vocational training into the school system, along Swedish lines. However,
this plan was not implemented, since by the 1980s the Danish Social Democratic party
was no longer the only party in government and its coalition partner, the Liberal
party, insisted that vocational training should be closely linked to economic realities
(Wiborg, 2008). In Germany, on the other hand, the selective tripartite school system
remains in place today. As in Denmark and Sweden, the German Social Democrats
wanted to introduce non-selective comprehensive schools on a national basis, but
were unable to push this project through. True, there are opportunities for pupils
from the two lower types of secondary school (Hauptschule and Realschule) to move
on to higher-level schools, where they can obtain the upper secondary school-leaving
certicate (Abitur); in practice, however, mobility of this kind is very much the
exception. The strongly elitist nature of the German education system and the com-
paratively slow expansion of the tertiary sector means that the number of university
places for students is limited. On the other hand, the dual system does offer access to
435 Vocational training and the labour market
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
secure and relatively well-paid jobs, even at middle-management level, which now
makes it attractive even to school leavers with the Abitur.
Four more signicant differences between the two countries can be identied. First,
the reduction in the number of occupations has been considerably greater in Denmark
than in Germany. In Germany, training is provided for 365 different occupations,
while the gure for Denmark is now only 85. This has to do with the way in which
interest groups are organised in Denmark and the size of the country. With only ve
million inhabitants, Denmark is unable to provide appropriate vocational school
training courses in a large number of occupations on a nationwide basis. In Germany,
with a population of 82 million, the individual occupational groups are highly
organised on the employers side (e.g. in the craft sector) and are able to block
attempts to merge occupations. Second, vocational training in Denmark has a higher
theoretical content. Before they begin their actual training programme, all trainees in
Denmark have to complete a course of basic education, which may last up to one year
depending on individual needs. Third, the inuence of trade unions is considerably
greater in Denmark. Together with the employers, they sit on the management boards
of local vocational training schools and decide who should be appointed director. In
Germany, vocational training schools are run by the government, while the employers
control the implementation of vocational training through the chambers of com-
merce. Fourth, a levy-grant system has been introduced in Denmark without any
major controversy in order to combat problems of freeriding and poaching. All rms
pay into a fund managed by the social partners, and rms providing training are
compensated for the wages paid to trainees on the two days a week they spend in a
vocational training school. The former SDPGreen coalition in Germany did actually
get a bill through the German parliament that would have introduced a similar
system. However, the government did not dare implement it because the employers
made it clear that they would have contested it as a matter of basic principle. Fifth, the
links between initial and further training have been improved in Denmark through
active labour market policy and the high-income-related unemployment compensa-
tion (Lassen et al., 2006). Germany, however, went in the other direction with the
Hartz Acts from 2004 onwards. The income-related unemployment benet for the
long-term unemployed, which protected skilled workers, was abolished and replaced
by a at rate. At the same time, long-term vocational training programmes for the
unemployed leading to the award of a vocational certicate have been cut
substantially. Labour market policy in Germany is now aiming for fast placements
rather than upskilling as in the past.
Despite these differences, developments in both countries show that, notwithstand-
ing substantial structural changes in the economy, such as the introduction of new
technologies and forms of work organisation and the expansion of the service sector,
traditional vocational training can still be an important instrument for creating an
intermediate tier of skilled workers. The precondition for the continuing relevance of
vocational training seems to be the extension of training to cover new industries and,
with the help of the social partners, the modernisation of occupations and the foster-
ing of strong links to the labour market. It also seems that easy access to jobs and
relatively high pay for qualied workers throughout the economy because of industry-
wide collective bargaining all contribute to the continuing attractiveness of vocational
training for young people. What might undermine the foundations of the dual system
in Germany is the recent decline in coverage by collective bargaining, and the corre-
sponding increase in the share of low-wage skilled workers (Bosch and Weinkopf,
436 Gerhard Bosch and Jean Charest
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
2008). If the links between pay and vocational training, which are stable in Denmark
(Westergaard-Nielsen, 2008), are loosened by a further erosion of collective bargain-
ing, the attractiveness of vocational training for parents and young people will decline
and the political pressures to expand tertiary education will increase. It is already the
case that companies in low-wage industries are experiencing increasing difculties in
recruiting apprentices.
THE USA AND CANADA: VOCATIONAL TRAINING IN A LIBERAL
ECONOMIC CONTEXT
Back in the 1950s, both the USA and Canada had well-developed apprenticeship
systems. These apprenticeship systems had been established largely as a result of
collective bargaining between unions and employers. Despite the proven history of
apprenticeships for training skilled workers, apprenticeships are used today only for
a very limited range of occupations and are certainly one of the most neglected areas
of the training system. Apprentices in the USA and Canada are older than those in
Germany and Denmark. Most of them enter an apprenticeship not as school leavers
but in their 20s after some years of work experience. The problemof lowparticipation
in the apprenticeship systems has long been recognised and a number of factors have
been adduced in explanation. One is that apprenticeship training was never formally
integrated into the school system and the state played only a marginal role, mainly as
a contractor for off-site training in community colleges. Both in Canada and the USA,
the decentralised system of industrial relations did not seem to encourage the social
actors involvement in the apprenticeship system. The education system, on the other
hand, was not able to take charge of a training delivery method which, by denition,
requires close collaboration with the labour market. Therefore, apprenticeship train-
ing was dependent on collective bargaining or, in the absence of collective agreements,
on employers willingness to train. Consequently, the number of apprentices fell with
the decline in trade union density and coverage by collective agreements. Those in
craft unions were locked into their trades by demarcations. These demarcations were
a barrier to the introduction of newforms of management based on teamwork and the
exible distribution of tasks. In these two liberal market economies (Hall and Soskice,
2001), there were no national trade union federations or employer organisations
capable of dealing with vocational training issues (a consequence of the decentralised
industrial relations system). Instead, the design of the system was left to an interven-
tionist state that bundled these fragmented vocational training pathways into a
national system and breathed new life into an old system.
The USA now has about 500,000 apprentices at any given time. In Canada, the
average has been about 200,000 over the last decade, but the completion rate is very
low. In fact, except for the construction industry (Charest, 2003; Philips, 2003), the
apprenticeship system in both countries is not highly developed and has not under-
gone any genuine revival. The Canadian government has set itself the goal of doubling
the number of apprentices who obtain their certication between 2002 and 2012.
Formal apprenticeship is no longer an important component of initial vocational
training in either the USA or Canada. Many companies may have reacted to the
decline of the apprenticeship systemby extending their own training. They often work
closely together with community colleges and other training providers. However, it is
difcult to get a clear picture of these interactions and the quality of training pro-
vided, since it is not based on generally recognised standards. In 1994, the US
437 Vocational training and the labour market
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
Congress created the National Skill Standards Board, which was modelled on Euro-
pean systems such as the German dual system and the British NVQ system. The
Board did not succeed in establishing a national system of skill standards. One of the
reasons was the weakness of the employers at the national level. Some employers have
cooperated with the board, but not employers collectively (Bailey and Berg, 2008).
Faced with a looming shortage in the skilled trades, governments in Canada have
been pursuing a number of initiatives in an effort to increase participation in
apprenticeships. With the exception of some scal incentives, almost all of these
initiatives are promotional in nature, with only a very small number aimed at directly
increasing the number of apprentices hired by employers.
Even though union density in Canada is still more than double that in the USA, the
social partnership is not very well structured. The nature of the industrial relations
systemwhich is decentralised to the level of the rmis certainly an important
explanation for this low level of partnership at industry or macro levels. Where
vocational training is concerned, the state has made some effort since the 1990s to
improve the capacity of employers and unions to work together. Probably the most
interesting innovation here is the introduction of industry (sector) councils. There are
currently about 30 in place at the national level. The original model for the industry
councils was one of unionemployer parity. However, this requirement has long since
been abandoned (except in Quebec, where there is also a levy system), as councils have
been created in numerous sectors with low union density. Even where union density
is higher, some have been created without equal union presence. At the federal level,
a Labour Force Development Board was created in the early 1990s ( just before the
National Skill Standards Board in the USA). This national board collapsed in 2000,
after only nine years in existence, when business representatives indicated they could
no longer support the organisation. The impact on vocational education has been
negligible, although it did have some inuence in shaping systems for labour market
information collection and dissemination and encouraging increased use of Prior
Learning Assessment and Recognition. In a certain sense, in establishing various
forms of partnerships among stakeholders, Canada has mimicked the social bargain-
ing structures of countries such as Sweden. However, in maintaining a purely volun-
tary framework with no control over anything other than their own operations,
governments have robbed partnership bodies of any capacity to signicantly inuence
what occurs in practice in vocational education (Charest and Critoph, 2008).
In addition to the weakness (or indeed complete absence) of the social actors and of
social bargaining structures, poor reputation, lowsocial status and the lack of internal
linkages are further sources of problems for the vocational training systems in both
countries. Today, most initial vocational training in the USA and Canada is school-
based. Vocational training has been traditionally dened as education for occupations
requiring less than a bachelors degree. All training for occupations above this level is
described as professional education, although this distinction is becoming blurred.
In both countries, the comprehensive high schools provide both vocational and
academic courses. In the USAin 2000, about 16.2 per cent of all credits earned in high
schools were in vocational subjects. In Canada, only a very limited amount of voca-
tional training for skilled or semi-skilled trades and professions starts as early as the
secondary level (only 10 per cent of students are in this stream). Most vocational
training occurs at the post-secondary level and, overall, youth participation in the
vocational system remains low in Canada, as compared with other OECD countries.
Only approximately one-quarter of young Canadians obtain a vocational studies
438 Gerhard Bosch and Jean Charest
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
diploma; the average rate for OECD countries rate is 44 per cent. Traditionally, most
vocational programmes in high schools were designed to prepare young people for
immediate work after high school. The vocational streams were more or less the end
point of participants education and training. In Canada, there are only a few bridges
between secondary-level vocational training and college studies or between college-
level vocational training and university, which makes the vocational training streams
dead ends to some extent. In contrast, general academic education is structured in
such a way as to provide a continuous progression from one level of education to
another. In the USA, an increasing proportion of graduates from the vocational
tracks in high schools are continuing their education in a two- or four-year public
college. The colleges are some of the main providers of vocational training. In the
USA, about 45 per cent of undergraduates are actually enrolled in community
colleges. Of these, about 60 per cent are enrolled in vocational programmes. The rest
are enrolled in transfer programmes, which entitle them to transfer to four-year
colleges in order to study for bachelors degrees. In the past, the two-year vocational
programmes did not provide for transfers of this kind and were not recognised by the
four-year colleges.
Today, it is generally agreed in the USAthat high-school graduates should have the
opportunity to enrol in a college (college for all). This de-emphasising of vocational
education has substantial implications for curricula, which cannot be as specialised
because the colleges have to provide enough general education for students to be able
to continue in college. In addition, the time-consuming practical learning has been
partly replaced by theoretical learning. The same development can be observed at the
two-year colleges. Thus, the distinction between general and vocational education is
becoming blurred (Bailey and Berg, 2008).
Education at bachelor level has always been designed to prepare students for
employment, but the link to the labour market has been weaker than in traditional
undergraduate degrees in Germany, for example. Students who wanted to get a
masters degree could, for example, earn a bachelors degree in liberal arts or history
and then train for a specic occupation, such as accounting, by doing an MBA. In
Germany, the decision to train for a specic occupational eld had to be made earlier
because the four-year rst degree more or less encompassed both bachelors and
masters level programmes.
2
With the expansion of tertiary education and the incremental replacement of the
college for all by the bachelor for all ethic, more and more bachelors degrees are
being offered for occupations that in the past were considered below the bachelor
level. Nursing is one example. The vocational training provided at colleges or univer-
sities is now often considered too theoretical for the jobs in the intermediate tier for
which many bachelors are recruited. To compensate for this lack of practical learning,
colleges offer labour market integration courses (reverse transfer). Thus, the distinc-
tion between vocational and professional education is also becoming blurred. In
Canada, this professionalisation of vocational training is related to the presence of
professional associations, which inuence graduate access to the labour market (this
is the case for approximately one-quarter of university students). Moreover, for the
2
Bachelors and masters degrees will also be introduced in Germany, as in all other EU countries, through
the Bologna process. Following the German tradition of occupational labour markets, it can be expected
that most students will acquire masters degrees in the same or a related occupational eld as their
bachelors degree. Thus, the traditional rst degree might survive in a new form.
439 Vocational training and the labour market
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
last few years, there has been an increase in internships organised for students by
universities in those occupational elds where professional associations exist.
The links with the labour market and work organisation are also less tight than in
Denmark or Germany. For instance, in many cases, companies only shape work
organisation with reference to occupational training standards if legal certication
requirements exist. This is the case in many professions, such as engineering or the law.
Certication requirements tend to protect highly skilled work in occupations with
strong lobby organisations. Below this level, in both countries, the links between
vocational education and the labour market are highly informal. Skill certicates are
mainly used as signals informing employers of applicants skill levels. Only a few US
states support training by putting in place licensing arrangements for a few occupa-
tions. Other states support collective agreements on training levy systems in the
construction industry by laying down terms and conditions that have to be met by all
rms bidding for public procurement contracts. Research has shown that apprentice-
ship rates are higher in states that have such regulations than in those that do not
(Philips, 2003).
There are many reasons for the continuous shortages of skilled labour in the
intermediate tier: the decline in apprenticeship training, the weak links between
school-based vocational training and the labour market, the weakness of social part-
nership and the lack of standards, which reduces training quality as well as the
visibility of acquired training in the labour market. This is partly offset by a selective
immigration policy aimed at skilled workers and by a mode of work organisation that
concentrates competences at the upper end of the hierarchy. For the time being, there
are few indications that Canada and the USA will be able to make the most of
vocational training, despite the fact that it could be benecial for certain categories of
young people.
THE GOVERNMENT-LED VOCATIONAL TRAINING SYSTEM
IN SOUTH KOREA
In the last 50 years, Korea has developed from a backward agrarian society into one
of the worlds most modern economies. One of the most important engines of this
development has been investment in education and training capital. Korea today
invests more than 7 per cent of GDP in education and training, which is more than in
most of the developed OECD countries (Table 1). More than 80 per cent of all
high-school graduates now go on to university and Korea has one of the highest
shares of high-school graduates in the 2535 age cohort (Table 1). Vocational training
played a pivotal role in supplying large numbers of semi-skilled workers during the
rapid industrialisation process (Yoon and Lee, 2008). The strongly vocationally ori-
ented system has been transformed into a system that is even more academically
oriented than those in the USA or Canada. This is quite a recent development, since
the Korean government used to restrict access to tertiary education, rst through
enrolment quotas and then by means of quotas regulating the number of graduates
the higher education system produced. The aim was to ensure that the expanding
manufacturing sector had a sufcient supply of semi-skilled workers. Owing to pres-
sures from parents and because of the structural change towards knowledge-intensive
industries, the Korean government deregulated higher education in the mid-1990s,
thereby paving the way for an explosive expansion of tertiary education.
440 Gerhard Bosch and Jean Charest
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
Korea has a single-track 6:3:3:4 system. Six years of compulsory primary educa-
tion are followed by three years of middle school, three years of high school and two
or four more years at college or university. Attendance at primary and middle school
is compulsory. Universal education was achieved at primary level in the late 1950s, at
middle-school level by the mid-1980s and at high-school level by the late 1990s.
Besides the general education stream in high schools, there is a vocational stream
divided into different areas (technical, commercial, agricultural). It is mainly students
from socially less privileged families and with a lower level of academic attainment
who enter this vocational stream. In recent years, the share of pupils in high-school
vocational streams has fallen, from 42.2 per cent in 1995 to 28.5 per cent in 2005. The
reason for this is the poor reputation of vocational education (Yoon and Lee, 2008).
Parents who want their children to have successful careers send them to the general
high schools. The dropout rate for vocational high schools tends to be two or three
times that of the general high schools and has not decreased in recent years, as it has
in the general high schools. Vocational training at high schools is no longer a dead
end stream, in which young people are prepared for immediate entry into the labour
market. Most students (62.3 per cent in 2004 compared to 19.2 per cent in 1995) now
go on to vocational junior colleges. The curricula of vocational schools are regarded
as too theory-oriented and the links with companies are weak. Although training now
has to be supplemented with work-based learning before graduation, companies do
not have much incentive to invest signicantly in students workplace learning.
The Korean strategy of rapid industrialisation could not be implemented by con-
ning responsibility for training to vocational schools and educating and training
the new generation of workers alone. The government saw the need to expand
in-company training not only for new entrants but also for older workers already in
post. Many of this latter group had only low levels of education and training but were
facing rapidly increasing demands as a result of technological development. With the
development of new, capital-intensive industries, such as steel and chemicals, the level
of in-company training was proving to be inadequate. The government therefore
sought to ensure that industry itself assumed more of the responsibility for training.
The 1976 Vocational Training Act introduced a levy system. Companies with more
than 300 employees that failed to train the percentage of their workforce (mainly new
entrants) xed by the government had to pay a levy. As many companies preferred to
organise their own training programmes rather than having to pay for programmes
outside their control and as the pro rata levy, xed at 6 per cent, was very high, the
number of in-company training programs increased considerably. When the expan-
sion of heavy industry slowed down and the government reduced the levy rate, the
share of companies providing training programmes fell signicantly. This demon-
strated just how much skills training in companies had developed as a direct conse-
quence of government intervention and how few companies had introduced training
programmes on their own initiative.
This system slowly eroded. The big conglomerates (chaebols) became increasingly
independent from government protection and, with the deregulation of markets, the
role of government was restricted. A new but different levy system was introduced in
the 1990s through the employment insurance system (EIS). The EIS is a combination
of an unemployment insurance scheme and a levy system for training programmes.
The levy varies by size of rm and is borne by rms alone. In practice, it amounts to
a tax on companies because the state alone, rather than the social partners, decides
how the resources are used. One new feature is that this system now also covers
441 Vocational training and the labour market
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
non-regular workers and smaller companies. Funding is targeted primarily at
in-company further training and training for the unemployed. When the number of
unemployed workers rose after the Asian crisis, most of the available funds were spent
on providing further training for the unemployed. Now that unemployment has
fallen, the number of unemployed people receiving further training has declined
considerably and the focus is now on promoting in-company training. Companies
receive subsidies from government for providing in-company training. These grants
are paid by the government on application from the companies. Companies can also
still obtain loans at low rates of interest for investments in training facilities and
equipment. Companies have more leeway than under the old system to organise their
training. Evaluation has shown that grants stimulate training in companies and
improve their performance (Yoon and Lee, 2008). The scheme is regarded as a means
of mitigating under-investment in rm-based training in Korea.
There has been little success to date in linking school-based vocational training and
training for the unemployed to the labour market. The Korean labour market is
highly dualistic and is segmented into regular and non-regular workers. The labour
market for regular workers is characterised by lifetime employment, low risk of
layoffs, good social security, trade union representation (at least in larger manu-
facturing companies) and minimal inter-company mobility. It is primarily regular
employees who benet from in-company further training, although this is not
reected in their pay. In contrast to Japan, where in recent years seniority-based wage
systems have increasingly been supplemented by performance-related components,
the Korean wage system for regular workers continues to be based almost exclusively
on seniority. The market for irregular workers can be described as a competitive
market, in which there are virtually no rules imposing restrictions on hiring and ring.
Wages are set in accordance with market conditions, irregular workers have little
union representation, some of them are not integrated into the social security system,
and day labourers and agency workers are taken on for limited periods only. The
share of irregular workers, dened as those working for a specic length of time and
not entitled to certain allowances, rose from 42 per cent in 1995 to 52 per cent in 2002
(OECD, 2003: 135136). In addition, the wage gap between regular and irregular
workers has increased substantially in recent years. Because of increasing segmenta-
tion in the labour market, rising wage differentials and very restricted opportunities
for mobility among irregular workers, the rst job is decisive for lifetime income. This
has further intensied the erce competition among young people, who compete for
the best jobs by improving their academic level. Students with vocational school
qualications are the losers in this competition. The majority of students with such
qualications enter the labour market as unskilled and irregular workers. Most of
them say that the content of vocational training has no relevance to their subsequent
job. This has increased the reluctance of parents to enrol their children in vocational
streams. There have already been negative reactions to the overproduction of univer-
sity graduates. Unemployment in this group is now higher than among their peers
who have completed vocational training courses and a third report that their job tasks
are not commensurate with their educational attainment (Yoon and Lee, 2008).
In Korea, the decentralised industrial relations system and the lack of cooperative
relations between employers and unions explain the weak social partnership, espe-
cially in training. Low mobility between the labour market segments, the high turn-
over in small and medium-sized rms and the seniority-based wage system mean that
many employees have little economic incentive to invest in their human capital
442 Gerhard Bosch and Jean Charest
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
(Bosch, 2005). Consequently, education and training policy in Korea is largely the
responsibility of the state, which pursues long-term development goals and considers
its statist approach justied in the light of companies poor record in providing further
training on their own initiative. During the period of dictatorship, trade unions were
unable to develop, and even after democratisation they remained primarily company
unions for regular employees, with weak umbrella organisations. Collective bargain-
ing also takes place primarily at company level and applies only to the core workforce,
which is tied to the rm by the seniority-based wage system. This industrial relations
structure makes it difcult to integrate vocational training more closely with the
labour market. Furthermore, the state has not to date been willing to give the social
partners any inuence over the administration of EIS resources. The Korean Ministry
of Labour lays down standards for vocational qualications and implements them
through an in-house body known as the Human Resource Development Service. In
Koreas highly dualised labour market, however, such standards have little impact
because they require open occupational labour markets if they are to have any effect.
CONCLUSIONS
In recent decades, the differences between the education and training systems in the
liberal and coordinated market economies have increased. At the beginning of this
article, we asked whether, after decades of divergence, these systems might be begin-
ning to converge again. Two phenomena in particular suggest that this might be the
case. First, the liberal market economies are again investing more in further voca-
tional training, to make good shortages of intermediate skills. Second, the coordin-
ated market economies are placing greater reliance on general and tertiary education
in order to cope with the transition to services and knowledge-intensive activities.
We have been able to observe convergence in general education. All the countries
investigated are seeking to raise the level of general basic education. They are all also
expanding their higher education systems; this process is only just beginning in
Germany and its effects on the labour market will not be felt for some years to come.
In VET, however, the differences are just as great as before.
Denmark and Germany have succeeded in revitalising their vocational training
systems. Occupational proles have been modernised and new service occupations
have been created. At the same time, closer links have been established between
vocational training and general education. The proportion of school-based, theoret-
ical education has been increased and there are now greater opportunities for those
who have completed vocational training programmes to go on to university, so that
vocational training is regarded less as a dead end. In Germany, so-called dual study
programmes have been introduced as a sort of hybrid between vocational training and
tertiary education. In both countries, there are clearly delineated further training
paths leading to middle-management positions. The reforms have not been solely
technical but also political in nature. They were initiated by trade unions and
employers associations that have acquired decades of experience with vocationally
educated employees and did not want to forgo their potential. For example, German
companies that have invested abroad have observed how ineffective communications
are between the semi-skilled operative level and the academically qualied managerial
level in countries with polarised skill structures. The social partners involvement in
the reforms has meant that the modernised and new occupations are regarded
by companies as their occupations. This was the precondition for the creation of
443 Vocational training and the labour market
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
training places and the linkage with remuneration systems, career paths and work
organisation. In both countries, vocational training has remained attractive to young
people precisely because it offers good prospects for career development. In neither
system, however, can the warning signs of possible crisis be overlooked; they include
competition from tertiary education, companies increasing reluctance to provide
training in deregulated product markets and, in Germany, increasing income differ-
entiation and the tripartite education system with its early tracking. However, such
crises can also give rise to newcorporatist solutions, as they have in the past. We agree
with Iversen and Stephens (2008) that a distinction has to be made between different
types of coordinated market economies. Denmark is one of the social democratic
welfare states in which equality of opportunity plays a greater role than in the
Christian Democratic welfare states, of which Germany is one, with their more
highly differentiated school systems and greater social inequality. The trade unions in
Denmark play a greater role in this regard than they do in Germany.
In the USA and Canada, the two liberal market economies investigated here,
there has not been any attempt to revitalise the apprenticeship system. In the decen-
tralised industrial relations systems that characterise these countries, there are no
actors at national level who might have helped their craft unions and the industry-
specic employers associations to go beyond the narrow occupational and industry
focus in which their organisational structures trap them, often to the point of
immobility. In both countries, vocational training is largely school-based. The aim
of such training at high schools has traditionally been direct transition into the
labour market. The qualications are today becoming increasingly less specic; that
is, they also confer entitlement to college entry. Similar developments can be
observed in the two-year colleges. In this school-based system, vocational training is
increasingly migrating upwards, to the level of associate and bachelors degrees.
This is one of the reasons why a much higher proportion of the 2435 age cohort
in these two countries has a tertiary education qualication than in the countries
with strong apprenticeship systems. However, integration with the labour market is
weak. True, the qualications are valued by rms as signals of future individual
productivity but, in view of the inadequate standardisation of curricula and quali-
cations, it is not clear whether the important factor here is just the qualication
itself or whether the actual contents of the training programmes also play a role.
Rising income inequality in the liberal market economies has in many cases led to
cuts in wages for intermediate skills, which has reduced the attractiveness of voca-
tional training. However, isolated examples, such as licensing, or the introduction of
more rigorous terms and conditions for public tendering, show that even in liberal
market economies, the state does have the power to integrate vocational training
into the labour market and can be effective in ghting under-investment in training.
Thus, even in the USA and Canada, there are political choices to be made. The
failure to take advantage of the scope for choice, other than in Ireland for example
(Ryan, 2000), is undoubtedly linked to the aversion towards product market regu-
lation and the strong focus of education and training policy on academic quali-
cations, that is on the interests of the upper-income groups.
Koreas impressive industrial development cannot be explained without the coun-
trys high level of investment in education and training. The role of the state has been
crucial here. The main emphasis has been on the development of the general educa-
tion system. It is true that this system also has vocational channels, but today it is
mainly young people with the poorest qualications who enter these channels. In
444 Gerhard Bosch and Jean Charest
2008 The Author(s)
Journal compilation Blackwell Publishing Ltd. 2008
Korea, as high as possible a level of qualication acquired in the general education
systemis the crucial precondition for obtaining a permanent job in the primary labour
market segment with good employment and working conditions. Increasing income
inequality and labour market dualism have further undermined the reputation of
vocational training. In contrast to the liberal economies, the Korean state does not
leave rm-based vocational training to rms but compels them to pay a levy for
further training. The funds are used to support the states industrial strategy. The
social partners play no role here. Industrial relations are decentralised and concen-
trated largely at rm level. Through the levy system, the state distributes considerable
resources for in-company vocational training. However, integration with the labour
market is weak because the social partners in this highly dualistic labour market do
not negotiate on pay systems and career structures based on training.
Given that our comparison is restricted to only ve countries, a necessarily cautious
response to our initial questions might run as follows. (i) One fundamental factor in
determining the attractiveness of vocational training is the linkage with the labour
market, with good pay and with opportunities for promotion. Without the close
involvement of the social partners this linkage remains weak. (ii) National corporat-
ism is the decisive factor in determining the social partners involvement because it is
only at national level that new occupational proles can be developed and standards
can be set. Corporatism at local level is important for implementation of those
standards, but is not a substitute for national corporatism in open labour markets.
(iii) When the social partners are weak, the state can step into the breach. In Korea,
with its state-driven industrialisation, this has been deliberate policy. In the USA and
Canada, with their free-market ideology, it is one of historys ironies that the state
plays a greater role in education and training policy than in the corporatist countries
because, in the absence of other actors, it is forced to integrate vocational training into
the general education system, albeit with limited success. (iv) In all the countries,
recent reforms have created new bridges between vocational training and the general
education system, although with differing effects. In the liberal economies, general
education is increasingly crowding out vocational courses. In the coordinated econo-
mies, the establishment of such bridges was a response to increasingly complex
requirements in the various occupations, including the growing importance of soft
skills.
Our analysis conrms our initial assumption that developments in vocational
training cannot be understood solely by examining the inner dynamics of education
and training systems. They do not acquire their societal signicance and their value
for companies and trainees until they are embedded in the labour market. In par-
ticular, differences in industrial relations, welfare states, income distribution and
product markets are the main reason for the persistent high level of diversity in
vocational training systems. The difference can perhaps be summarised as follows:
in the coordinated market economies, the modernisation of vocational training
is seen as a contribution to innovation in the economy, while in liberal market
economies it is seen as a siding into which weaker pupils can conveniently be
shunted.
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