GSSS Working Paper. Varieties of Transitions from Higher Education to Work

Transcription

1 Graduate School of Social Sciences Kathrin Leuze GSSS Working Paper Varieties of Transitions from Higher Education to Work GSSS-Working Paper No. 3 / 2007 Graduate School of Social Sciences Universität Bremen Postfach Bremen Germany kathrin.leuze@sfb597.uni-bremen.de

2 Editor: Graduate School of Social Sciences Universität Bremen Postfach Bremen Tel.: ++49 (0) / -4149/ Fax: ++49 (0) ISSN X (Internetausgabe) ISSN (Printausgabe)

3 Abstract Previous research on graduate employment points to cross-national similarities regarding the comparative advantage of higher education, but also to differences in terms of quality of initial employment positions. This paper looks for reasons of these divergent outcomes and provides an institutional perspective on the specific production mechanisms of graduate career mobility in different countries. It argues that the occupational specificity of higher education is vital for establishing closer or looser link to the labour market and accordingly for shaping early labour market careers. To test this assumption empirically, it analyses how the organisation of professional and management training influences graduate career mobility in two countries most different in their degree of occupational specificity Britain and Germany. The institutional analysis points to a tight coupling between higher education and work in Germany and a loose one in Britain. However, the application of discrete time piecewise constant hazard models to the German Socio-economic Panel and two British cohort studies (NCDS and BCS70) reveal that the picture is more complex than initially assumed. The degree of occupational specificity can only explain the German pattern, where graduates are experiencing more job continuity and higher employment chances in professional and managerial positions than their British counterparts. In Britain, the more turbulent transition from higher education to work is dependent on a mixture of occupation-specific training and demographic factors. Key words: higher education, career mobility, education-to-work transitions, Varieties of Capitalism, occupational specificity

4 Table of Contents Introduction... 1 Occupational Specificity, Institutional Complementarities and Graduate Careers... 2 Institutional Complementarities between Higher Education and Work... 4 Professional Training between State Dependence and Autonomy... 5 Specialist and Generalist Management Training... 6 Links between Higher Education and Professional/ Management Training... 8 Data, Variables and Methods... 9 The Importance of Occupation-specific Higher Education for Graduate Careers Finding a Job in the High Service Class (EGP I) The Determinants of Initial Employment Positions Mobility Patterns after Graduation Varieties of Transitions from Higher Education to Work? References Endnotes Appendix... 24

5 Introduction Ever since the emergence of mass higher education, the connection between higher education and the world of work has been an important issue in sociological research. Particularly in Europe, the strongly increasing number of students in combination with tightening labour market conditions since the 1970s has given rise to the widespread fear of educating an overqualified academic proletariat. Studies on graduate employment have therefore often been inspired by the question as to whether the labour market perspectives of higher education graduates can still be considered adequate for their level of education. Empirical results indicate, however, that this fear is up until today lacking any evidence. Despite the enormous increase in the total numbers of university graduates throughout the last thirty years and rising unemployment among the labour force as a whole, higher education graduates all over Europe still have quite favourable starting positions when compared to secondary school leavers and holders of vocational qualifications. They are still likely to enter the labour market more quickly after graduation (Falk, et al. 2000, Hillmert 2001, Teichler 2000), to start their professional life in better job positions (Allmendinger and Aisenbrey 2002, Hillmert 2001, Müller, et al. 2002), to face unemployment less often and for shorter periods (Hillmert 2001, Müller 1998), and they also tend to achieve higher incomes than the rest of the labour force (Butz 2000). But notwithstanding these common positive prospects, cross-national comparisons demonstrate also that the quality of graduate employment differs substantially across Europe. It is particularly striking that in some countries students have far better chances of obtaining a high-status job quite easily after graduation and are generally more satisfied with their degree course (Brennan, et al. 1996, Teichler 2000, Teichler 2002). Table 1 exemplifies these findings for Britain and Germany. In both countries it takes less than half a year to find a first job, and almost 90 percent of a graduation cohort is employed within four years after graduation. However, it is much easier for German graduates to obtain a job as professionals or legislators, senior officials and managers, i.e. positions typically aimed for with higher education qualifications. On the other hand, a substantial proportion of British graduates are employed as clerks, low-level sales personnel, or manual workers, i.e. in positions that are generally considered as inapt for people holding a higher education degree. The inadequacy of British higher education for favourable labour market entries becomes even more apparent when comparing the subjective evaluation of university education: the proportion of those who do not see a match between their field of study and their area of work is almost double as high in Britain (27%) as it is in Germany (15%). 1

6 Table 1: Employment measures of German and British 1995 higher education graduates Germany Britain Duration of job search after graduation (months) Employed four years after graduation (%) as professionals, managers, etc. (% of employed) as clerks, workers, etc. (% of employed) 5 11 Wrong field / higher education not necessary (%) Source: CHEERS data, Teichler 2002a Altogether, research on graduate employment points to cross-national similarities regarding the comparative advantage of higher education, but also to differences in terms of quality of initial employment positions. The question now is how to explain these divergent findings. What makes for a good start after higher education? Is it the result of economic circumstances, individual capabilities, or rather cultural specificities? This paper provides an institutional perspective on the specific production mechanisms of graduate career mobility in different countries. It begins with the observation that cross-national differences of vocational education to work transitions can be explained by the degree of occupational specificity of a country s vocational training system. By applying this logic to the field of graduate employment, it argues that the occupational specificity of higher education is vital for establishing a closer or looser link to the labour market and accordingly for shaping early labour market careers. In order to examine the impact of different institutional environments on graduate employment empirically, professional and management training are examined for two most different country cases regarding their degree of occupational specificity Britain and Germany. Whether and how institutional environments translate into career outcomes is tested for both countries by analysing graduate career mobility during the first five years after graduation. Occupational Specificity, Institutional Complementarities and Graduate Careers The general theoretical problem of successfully assigning job seekers to places of employment and thus of analysing the transition from higher education to work can be referred to as matching problem. The economic job-matching theory (Jovanovic 1979, Sattinger 1993) stresses that a good labour market match is not only the result of an employee s adequate education and experience, but also depends on job characteristics and employer preferences. For a successful assignment to come about, employer and job applicant have to make a positive decision: the employer to hire, the applicant to accept the job conditions. But since both have to make their decisions under conditions of imperfect information, job mismatches i.e. a low degree of fit between required and acquired skills are 2

7 likely to occur. Career mobility takes place because employers and employees are interested in finding an optimal match and accordingly try to re-adjust the assignment until this has been achieved. Consequently, from the perspective of job-matching theory, initial employment positions after higher education and early career mobility are the outcome of such a two-sided matching process. High status employment can be considered as good match, while low status jobs indicate a mismatch that has to be adjusted. This micro-economic approach, however, cannot explain why in some countries the assignment process functions better than in others. It neglects that decision making processes not only depend on specific job requirements, preferences and recourses of the actors involved, but also on the institutional environment, which affects the range and sequence of alternatives of the choice-agenda (North 1990). Country-specific variations of the institutional settings will, accordingly, give rise to different matching processes and create particular mobility patterns. So far, no institutional framework for the assignment process of higher education graduates has been developed. Yet, for the field of vocational training a great deal of literature has already investigated the impact of various forms of education and labour market institutions on individual career mobility. Two basic types of institutional contexts can be distinguished (see Allmendinger 1989, Kerckhoff 2001, Marsden 1990, Maurice, et al. 1986, Müller and Shavit 1998): a more occupationalised one operating in countries like Germany, where young people are predominantly trained within a standardised apprenticeship system and from thereon experience rather smooth trajectories into the labour market, and a more organisation-based system as said to exist in Anglo-Saxon countries, where universal and comprehensive education without an institutionalised vocational training leads to a more turbulent labour-market integration marked by a sequence of stop-gap jobs. These countryspecific transition patterns are deemed to result from the occupational specificity of a training system (Gangl 2000b, Gangl 2002, Hannan, et al. 1999, Marsden 1999, Rubery and Grimshaw 2003), which is defined as the number of degrees designed for a specific occupation and the orientation of curricula towards the teaching of specific vocational knowledge (Kerckhoff 2001, Müller and Shavit 1998). The theoretical argument holds that educational resources are not per se beneficial for individual career outcomes as human capital theory (Becker 1962, Mincer 1970, Schultz 1961) would predict but rather that the structure of education systems as providing either fairly general training or more occupation-specific training has an effect on the individual career mobility. This dichotomy of institutional arrangements can be considered to stem from specific institutional complementarities between training systems and labour markets of different political economies. The notion of institutional complementarities is central to the Varieties of Capitalism approach (Hall and Soskice 2001), according to which two institutions are said to be complementary if the presence (or efficiency) of one institutional sphere increases the returns from (or efficiency of) another (Hall and Soskice 2001: 17). Two different types of political economies with specific institutional complementarities between vocational training and labour market can be differentiated: Coor- 3

8 dinated market economies (CMEs) such as Germany, on the one hand; the employ production strategies that are based on cooperation and trust, that rely on a highly skilled labour force with substantial work autonomy, and consequently depend on a training system that provides workers with such skills. The matching problem is solved in CMEs by a publicly subsidised vocational training system that is supervised and coordinated by industry-wide employer associations and trade unions, which ensure both that the training fits the firms skill requirement and that free-riding on the training of others is limited. Liberal market economies (LMEs) such as Britain or the US, on the other hand, are largely shaped by market competition. Due to highly fluid labour markets with high job turnover, firms are reluctant to invest in apprenticeship schemes imparting occupation-specific skills where they have no guarantee that other firms will not simply poach their apprentices without training themselves. As a consequence, no standardised vocational training system exists; rather, individuals are encouraged to invest in general skills transferable across firms and industries. Even though Hall and Soskice do not consider individual career mobility and their relation to Varieties of Capitalism, it follows from above that country-specific transition regimes are the result of institutional complementarities. The application of this argument to higher education leads to the conclusion that different political economies should vary in the degree to which they also offer more or less occupation-specific university education. In CMEs, a high degree of occupational specificity should guarantee smooth trajectories for graduates with matching employment positions, and educational credentials should be the primary criterion for career mobility. In LMEs with a low degree of occupational specificity, the initial match between higher education and job should be less favourable, while discretionary employer recruitment and promotion strategies should play a crucial role for adjusting early labour market careers. Institutional Complementarities between Higher Education and Work But what kind of institutional complementarities between higher education and work might create a lower or higher degree of occupational specificity? Since the boom of educational expansion in the 1970, it has been a longstanding tradition to stress the importance of professional and management training by higher education institutions. Archer, for example, argues that the linkage between the university system and the labour market has to be analysed with reference to the professional training provided by the university (Archer 1972), while Ben-David (1977) and Clark (1994, 1995) have pointed at the increasing demand in professional and management training by the labour market (Ben-David 1977, Clark 1994, Clark 1995). Occupation-specific training can thus be conceptionalised by studying how the provision and use of professional and management skills is organised in different political economies. The short description of the institutional organisation of professional 4

9 and management education in Germany, representing CMEs, and Britain as an example of LMEs will serve to identify different forms of institutional complementarities. Professional Training between State Dependence and Autonomy There is a longstanding sociological tradition to define a profession as an occupational group which, based on its claim to expert knowledge, enjoys a high degree of work autonomy, in return for professional self-regulation. But only recent years have experienced a rising interest in the development of the professions in different countries. They strikingly reveal that most of the established professions within a particular country developed in a similar way; however, national paths differ substantially. Especially Britain and Germany have had radically different historical trajectories of the evolution of professional systems (Abbott 1988). In Britain, the classical professions of law and medicine claimed their autonomy from the state already in the early 17th century and thereby defined and circumscribed the role of the liberal state. In Germany, on the other hand, autocratic rulers, both before and after national unification in 1871, incorporated the equivalent occupations into the state and defined the professional service as state service (Lane, et al. 2000, Neal and Morgan 2000). As a consequence, professional development in Britain emerged independent of the state as a result of voluntary association. In Germany, to the contrary, the state has played and continues to play an active role in the establishment, structuring and administration of professions. These different historical trajectories have implications for the acquisition of professional qualifications. Since in Britain the formation of independent professions preceded the secure establishment of higher education 1, professional autonomy from the beginning has meant also control over education and training, accreditation, awarding of professional credentials, and admission to the professions (Lane et al. 2000). Even though in the course of development academic routes were established, only some of the professions, like those in science and only recently in engineering, moved into the universities within the framework of a three to four-year study programme (Lane 1989). Nowadays, particularly some of the postgraduate degrees aim at teaching applicable knowledge for professional life (e.g. LLM for lawyers or MSc for engineers). But despite those recent developments, it was, and still is, a characteristic of the British system of professions that professional associations remain to a large extent responsible for training future professionals outside formal higher education. In Germany, in contrast, independent professions did not emerge until the university system was already well established. Hence, professional education was and is nowadays firmly in the hands of the state-regulated higher education system (Lane, et al. 2000). 2 In the beginning, this was particularly true for potential civil servants, such as lawyers, but during the early nineteenth century universities gradually expanded the professional subjects, introducing new academic degrees for areas con- 5

10 sidered desirable for the state. Until today, the purpose of studying at German higher education institutions is to prepare students for a profession in a certain sphere of activity (BMBF 2002). Professional qualifications are conferred on the basis of examinations from universities and Fachhochschulen, the latter being characterised by a very strong practice-orientation. At universities, some fields of study such as medicine, law, or teaching are particularly practical, since professional training constitutes an integral part of the degree course. Professional associations, on the other hand, have neither direct influence over contents of training or accreditation, nor over the number of new entrants into the profession. Overall, the link between the professions and higher education in Britain and Germany not only differed in terms of prevalence, power, and influence of professional associations, but also in terms of their level of integration with the state. In Britain, professional associations rationalise and control professional education and training, while the state-controlled higher education system is hardly involved. Institutionally, the university system therefore cannot be considered to be complementary to the system of professions, since occupation-specific training predominantly takes place outside. In Germany, it is the state that prescribes and sanctions the kind of training required for entry into established or new professions. Higher education is thus complementary to the systems of professions, since higher education degrees form the necessary prerequisite to enter. The tight coupling between higher education and professions in Germany, and the self-regulation and independence of the British professions can be considered as first empirical indicators that higher education is more occupation-specific in Germany than in Britain. Specialist and Generalist Management Training More striking differences between Germany and Britain can be found when comparing the training of managers. Even though in everyday language the label manager embraces a number of different meanings, managers can be defined as occupying positions of leadership within an organisation, and they are required to carry out tasks such as policy formulation, work organisation and coordination, quality assurance or performance control. Since the word is of Anglo-American origin, it has entered the German usage only in recent decades, where it still coexists, and competes with the indigenous title Unternehmer (entrepreneur) or Geschäftsführer (CEO). Both terms have different social and organisational implications, because the latter mainly refer to the top of the business hierarchy rather than any leadership position, be it on lower or upper hierarchical level, as is the case in Anglo-Saxon countries (Lane 1989). In both countries, the larger companies today choose their future top and senior managers predominantly from among higher education graduates. However, there are substantial differences in degree level and subject of higher education, partly as a legacy of past practice, since German firms 6

11 have chosen their managers among graduates for a much longer period than have British companies. Generally speaking, British managers at all levels are more likely to have a professional management qualification gained outside higher education at colleges of further education or from professional institutes. Furthermore, a sizeable proportion of British managers has come up through the ranks and possesses no management qualification at all. If managers possess a higher education degree, a more general field of study is the norm and managers with an arts background are still common. Only in recent years, there has been a steady increase in the intake of graduates with management or business degrees. Also more people with engineering and science qualifications have moved into management, but these remain very often in staff positions and relatively rarely make it into the top management posts (Lane 1989). In Germany, managers may come up through the ranks as well, but top and senior managers in large firms are now predominantly graduates from either universities or Fachhochschulen. Since the Anglo-Saxon concept of management as a unified profession has only started to become accepted, no general management education exists. Rather, executive staff members are specialists in a certain field who have taken on extra responsibility by executing some of the management functions. This is mirrored by the degree subject studied by German managers. The majority of them possess a degree in engineering or science which has a strong occupational component and includes an internship in industry, particularly at the Fachhochschulen. To enable them to move into top management positions, engineers often receive in-firm training in basic economics, accounting, and computing skills. A high proportion of top managers hold a doctorate as well, again usually in science or engineering. Many managers at all levels have also served an apprenticeship and possess a vocational qualification, which in contrast to the situation in Britain is highly valued by employers (Briedis and Minks 2004, Kerst and Minks 2003). To sum up, scientific and technical knowledge, i.e. occupation-specific training obtained in higher education is a necessary prerequisite to acquire management positions in Germany. The British management education is more general in content and on the whole more disconnected from higher education, because most managers have moved up through the ranks, acquiring necessary qualifications in part-time studies while already pursuing their careers. This again seems to stay in line with the assumption that institutional complementarities between higher education and management training in Germany are much more pronounced, since they strengthen the notion of occupation-specific education. In Britain, a rather generalist education is still the norm and British companies seem to put a stronger emphasis on personal qualities than occupation-specific knowledge. 7

12 Links between Higher Education and Professional/ Management Training Overall, the analysis of professional and management training supports the Varieties of Capitalism argument of institutional complementarities between higher education and labour markets in both countries. The tight institutional coupling between higher education and the professional/managerial labour market in Germany is based on a highly occupation-specific training, where higher education degrees and in particular fields of study constitute the necessary prerequisite to success. British professional and managerial positions seem to be less dependent on occupation-specific credentials provided by the higher education system, while additional certificates and labour market experience seem to play a bigger role. The identified institutional complementarities should have specific effects on the career mobility of higher education graduates in both countries. In Germany, the tight coupling should guarantee a rather direct and stable entry into professional and managerial positions. Higher education graduates with occupation-specific higher education credentials should have no difficulty in obtaining a matching job shortly after university, but should perform better from the outset since they do not have to be trained (to the same extent) on the job as graduates with a more general training. This is due to fact that an occupation-specific qualification increases the amount of information available to the employer, so that the matching process should proceed smoothly and does not have to include a trial period during which the employee is assessed. Assignment can be made more rapidly and initial employment will be more stable since it is less likely that a skill mismatch occurs. Particularly strong differences by higher education subject can be expected. Classic professional training is mainly associated with health, education, and law. A degree in engineering and to a lesser extent in sciences or business should be the necessary prerequisite for entering managerial positions. The loose coupling in Britain should make a correct assignment more difficult and foster a much more turbulent labour market entry. The lack of occupation-specific higher education degrees entails the greater risk of unstable entry and lower entry positions. Occupational positions at the beginning of the work career are less likely to be professional or managerial positions, but rather transitory in character. Higher education credentials are relevant only insofar as they offer specific signals to the employer about a likely successful match. As the institutional analysis has shown, professional and management skills are seldom obtained through higher education degrees in Britain. If at all, they are mainly conferred in form of postgraduate degrees. In general, further training outside higher education, training on the job and work experience should be more of more importance. The differentiation by field of study should not be pronounced. 8

13 Data, Variables and Methods The institutional embeddedness of the transition from higher education to work is a process that does not take place at a specific point of time, but develops over a time period. Therefore, a longitudinal study of career mobility after higher education is necessary. In order to capture the nature of the transition period in both countries, the first five years after graduation are examined. The analysis of the transition from higher education to work is carried out with the German Socioeconomic Panel (SOEP) and two British cohort studies, namely the National Child Development Study (NCDS) and the British Cohort Study 1970 (BCS70). The SOEP is a longitudinal survey of private households in Germany (Haisken-DeNew and Frick 2005). It is conducted as a panel survey and includes a large variety of information on labour market positions, educational attainment, attitudes, or family status. This study takes account of all respondents with a higher education degree who graduated in the years while being surveyed by the SOEP, meaning that a total number of 878 graduates were included in the calculations. Data for Britain are drawn from the cohort studies NCDS and BCS70, both of them contain contemporaneous information on educational achievements and family circumstances during childhood and adolescence, as well as detailed information on early labour market careers and mobility developments. The NCDS is a panel study of all the children born in the first week of March, For the analysis at hand, data from sweep 3 to 5 are used. The BCS70 began in 1970 when data were collected about children born in the week 5th-11th April. For the current analysis, sweeps 4 and 5 are employed. In order to achieve a period of labour market entry that is comparable with the German data-set, both cohort studies were pooled. The final data-set covers 3,540 graduates graduating between 1979 and (A description of both data sets can be found in Appendix A). For the analysis of graduate career mobility, several core variables have been considered. Work histories are observed directly after leaving higher education for the first time, while jobs before graduation are not taken into account. Measurement of the achieved professional or managerial status of the first full-time employment is not trivial in cross-national comparisons, since the definition of professions and even more so of managers is historically and culturally constructed, and therefore respondents mere self-description will not necessarily produce comparable data (see also Brauns, et al. 1997). However, the class scheme developed by Erikson, Goldthorpe und Portocarero (1979) (EGP) provides a useful attempt to overcome this problem, since it does not only take into account the actual occupation, but also further information about the work situation, such as the form of the employment contract, employer-employee relationship, or number of employees (Erikson and Goldthorpe 1992). Within the EGP scheme, the so-called high service class I (higher-grade professionals, administrators, and officials; managers in large industrial establishments; large proprietors) 9

14 is of special interest for measuring the probability of entering professional and management positions for higher education graduates (see Appendix B for the whole scheme). 3 To measure the higher education attainment, the CASMIN educational classification is applied. CASMIN is a certificate-oriented classification schema which has proved to be highly valuable in comparative stratification and labour market research. It distinguishes educational credentials according to hierarchical level (length, quality and value of education) on the one side, and according to whether they imply general or vocationally oriented education on the other (König, et al. 1988, Shavit and Müller 1998 for more details). For the British case the more refined CASMIN levels of general lower level tertiary degrees (3a_gen = Diploma, Certificate of Higher Education), first degree qualifications (3b_low = BA, BSc) and post-graduate degree qualifications (3b_high = MA, MSc, MBA, PhD, Postgraduate Certificate) are used. Since the German higher education system has been less differentiated during the period of observation, the basic CASMIN levels of lower tertiary education (3a = Fachhochschul-Diplom) and upper tertiary education (3b = university Diplom, Magister, Staatsexamen, Promotion) are taken into account. Fields of study are coded in six categories of the higher education subject in both countries, closely representing the classification used by the OECD publications (OECD 2004b): education; humanities and arts (including services); social sciences, business and law; sciences (including agriculture); engineering, manufacturing and construction; health and welfare. Intervening covariates on the micro-level consist of general demographic indicators such as gender, children under 6 years, socio-economic status of the father, and nationality/ethnicity. Furthermore, additional vocational training and the age of graduation are taken into account. To control for different labour market situations, the yearly unemployment rate of each country is included. The analysis of the transition from higher education to work is carried out by estimating discrete time piecewise constant exponential models with event history analysis (Blossfeld and Rohwer 1995, Jenkins 2004). By means of event history analysis it can be shown how the length of transition periods varies according to relevant covariates. As dependent variable, the hazard rate to a full-time job in EGP class I, i.e. the possibility of making a transition on the condition of having survived until that point of time is estimated. A model that does not impose too many restrictions on the shape of the hazard function and that furthermore has already proven its validity for studying education to work transitions (Falk, et al. 2000, Hillmert 2001) is the piecewise constant exponential model. Its flexibility stems from the possibility to allow hazard rates to vary between different time periods (Blossfeld and Rohwer 1995). Calculations are based on logistic regression using STATA Version 8.0, which is a straightforward way to analyse discrete time data with piecewise duration dependence. The bands of the time intervals are derived from the descriptive analysis of the survivor function. 10

15 The Importance of Occupation-specific Higher Education for Graduate Careers How does occupation-specific training translate into mobility patterns? And to which extent can country-specific differences of institutional complementarities between higher education and graduate labour markets account for individual career mobility? The following sections analyse the consequences of occupation-specific training for individual career outcomes in Germany and Britain. Finding a Job in the High Service Class (EGP I) The introduction of this paper has shown that higher education graduates generally face few difficulties in obtaining a job after graduation, but that the quality of employment differs tremendously across countries. The analysis of the transition from higher education to a full-time position in EGP class I confirms these findings; however, with the data at hand it is also possible to analyse explicit timing mechanisms of the transition process. The following aims to provide a descriptive overview of some core features of labour market entry in Germany and Britain. Figure 1 displays the EGP classes of initial employment positions obtained after graduation and compares it to a country s class distribution of both all persons in employment and those with a higher education degree. Figure 1: EGP class of employment in Germany and Britain 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% lower EGP class EGP class II EGP class I Germany Britain Germany Britain Germany Britain all people in employment with a higher education degree higher education graduates Data: German Mikrozensus 1995, SOEP, British Labour Force Survey 1995, NCDS/BCS70, author's estimations As expected, the most substantial differences between German and British graduates are between the proportion employed in upper and lower status jobs. In Germany, almost 40 percent find an occupation in EGP class I, i.e. obtain a high-grade occupational or managerial position, but only 22 percent are working in lower class occupations. In Britain, on the other hand, a higher percentage of gradu- 11

16 ates start their full-time employment career in lower class jobs (32 percent) than in high service class occupations (29 percent). Obviously, German higher education graduates find high service class jobs more easily after finishing university. Their British counterparts enter more often at the lower end of the job hierarchy. However, this country-specific distribution is not the same for all persons with a higher education degree. Again, a larger proportion of Germans hold occupations in EGP class I; however, the amount of people in lower classes is equal in both countries. This indicates that in Britain in particular, labour market entry is associated with lower status employment positions, but that thereafter upward mobility into better positions seems likely. Yet, the observed class distribution of graduates becomes even more striking when compared to all people in employment. The fact that the general amount of upper class positions is roughly the same in both countries points out that there is a much stronger association between higher education credentials and EGP class I positions in Germany than there is in Britain. The picture of a more favourable labour market start in Germany is confirmed when analysing the duration it takes to get a professional or managerial position. Figure 2 displays the Kaplan- Meier survivor functions of both countries, which indicate the share of persons that have not yet made the transition to a first job at any given point of time (Blossfeld and Rower 1995, Jenkins 2004). Obtaining a high grade professional or managerial position takes a much shorter time in Germany. More than 25 percent of all German graduates manage to obtain a job in EGP class I within three months after graduation, while it takes one and a half years for the same amount of British graduates to be successful. Figure 2: Time searching for a job in EGP class I Germany: Obtaining a High Service Class Job Britain: Obtaining a High Service Class Job Analysis time in month 95% CI Survivor function Kaplan-Meier survivor function for obtaining a first full-time job in EGP class I Analysis time in month 95% CI Survivor function Kaplan-Meier survivor function for obtaining a first full-time job in EGP class I Data: SOEP, NCDS/BCS70, author's estimations In sum, the descriptive results confirm the expected country differences with regard to entry into the high service class. Apparently, in Britain the transition from higher education to a first full-time job 12

17 in EGP class I is much more difficult for the majority of graduates than in Germany. This can be taken as an indicator that the historically tight coupling between higher education and the labour market in Germany guarantees an occupation-specific higher education which makes a job in the upper sector of the job hierarchy soon after graduation more likely. The loose coupling in Britain, on the other hand, prohibits an easy acquisition of occupation-specific skills in higher education and thus entry into the most favourite labour market positions. A more detailed multivariate analysis will shed further light on the question as to the role higher education credentials play for the transition process in both countries. The Determinants of Initial Employment Positions The results so far highlight marked differences in both the amount of students entering professional and managerial positions as well as the time it takes. If these variations originate from different institutional environments, they will remain after demographic characteristics and economic circumstances have been controlled for. Table 3 displays the odds ratios of entering EGP class I as first fulltime employment. Two types of explanatory factors related to the institutional context were of interest: type of higher education degree and field of study. As to be expected, in Germany the type of higher education degree has no influence on the chance of making the transition, while the field of education is the major predictor. This indicates that occupation-specific knowledge is, as initially assumed, mainly transferred through specific fields of study. Employers can rely on the specific training provided by the German higher education system and therefore are likely to hire graduates immediately after graduation for upper class professional and managerial positions. At the same time, however, students with less occupation-specific subjects are ending up in lower status positions, since employers have more difficulties in judging what graduates have been trained for. Interestingly, in Britain, the association between fields of study and type of first job can be found as well, but to a much lesser extent. 4 Of equally high importance is the type of higher education degree. Even though it is in general rather difficult to obtain a job in EGP class I straight after graduation, it becomes easier with a postgraduate degree. The association between higher education and the labour market in Britain is, accordingly, not as weak as initially assumed, but also influenced by characteristics of the higher education system. Nevertheless, these findings stay in line with the thesis that differentiation by type of degree or field of study determines initial employment positions to a lesser extent than in Germany. Strong differences between both countries are also revealed by the control variables. In Germany, demographic factors have only slight influences on the transition process. In Britain, on the other hand, a strong negative selection of women with or without young children, graduates from 13

18 lower socio-economic backgrounds, or with vocational education takes place. This indicates that in Britain, institutionalised forms of human capital are interacting with demographic variables when shaping early labour market opportunities. The sensitivity to changing labour market conditions reveals another interesting variation. In Britain, the transition to EGP class I is much more strongly affected by rising unemployment. This confirms the view of the British labour market as being more market-driven than the German one. Table 2: Logistic regression odds ratios for the transition to first full-time job in EGP class I Transition to 1. full-time job in EGP I Germany Britain Entry > 1 month (0.030) ** (0.012) ** Entry > 3 months (0.015) ** (0.003) ** Entry > 6 months (0.007) ** (0.002) ** Entry > 12 months (0.003) ** (0.002) ** Entry > 24 months (0.001) ** (0.001) ** Female (0.101) * (0.037) ** Female with child < (0.345) (0.152) * Non-German / Non-White (0.141) * (0.145) Father with higher degree / upper class (0.158) (0.076) ** Vocational education (0.154) (0.060) * Yearly unemployment rate (0.039) (0.016) ** Age of graduation (Ref.: years) years (0.283) (0.067) over 30 years (0.101) * (0.121) * Graduation in East Germany (0.179) HE degree (Ref.: CASMIN3a(gen)) CASMIN3b(_high) (0.150) (0.331) ** CASMIN3b(_low) (0.216) ** Field of Study (Ref.: Humanities) Engineering (2.488) ** (0.334) ** Science (1.265) * (0.307) ** Soc. Sc., Business, Law (1.475) ** (0.262) ** Health, Welfare (3.554) ** (0.355) ** Education (0.514) (0.210) No. of observations No. of transitions Log-likelihood null model Log-likelihood end model Chi square (15 degrees of freedom) Standard errors in parentheses, * significant at 5%; ** significant at 1%, Data: SOEP, NCDS/BCS70, author's estimations 14

19 One remarkable interaction effect between gender and higher education institutions is observable as well: In Germany, the discriminating effect of gender diminishes as soon as the field of study is controlled for. Apparently, women are more prone to study the wrong subject for entering favourable positions. Or, to turn it the other way around, that the labour market explicitly discriminates against specific subjects due to the fact that they are studied by a female majority. The British system does not entail such an association; it generally discriminates against women regardless of the field of study. In order to fully disentangle the interaction between gender and the institutional embeddedness of the transition process, further analysis is needed. To sum up, the multivariate analysis clearly shows that the degree of occupational specificity influences who is to successfully enter the high service class after graduation and who does not. But different institutional settings not only influence the matching between higher education credentials and first jobs, they also shape the way in which the transition process is influenced by demographic characteristics and economic circumstances. In Germany, ending up in full-time employment in EGP class I seems to be tied inevitably to an occupation-specific field of study. The least well-off are women who studied humanities, arts or education. Entering the upper service class in Britain is not as easy, since a transition is in general more difficult. However, a higher degree and to some extent the field of study make it easier. But also men, with or without children, from a high socioeconomic background have better chances to succeed, particularly in times of economic upturn. In contrast to the German system, the positive effect of some fields of study can only be considered as one factor among many others. Mobility Patterns after Graduation Apart from the determinants of initial employment positions and the timing of the matching process, it is the stability of first employment and the direction of occupational mobility that is important to assess the influence of institutional contexts. The specific institutional environments of both countries should have a strong impact on the duration of employment spells, as well as on upward and downward mobility patterns. It has been argued that a more flexible and market-driven labour market of Britain in association with a loose coupling between educational credentials and initial jobs are likely to produce unstable entry positions with a series of stop-gap jobs during the first years after graduation. In Germany, a good match from the beginning should ensure stable employment and less mobility, be it upward or downward. Figure 3 gives an overview of the number of full-time and part-time jobs held by graduates during the first five years after graduation in Germany and Britain. The reported number of individual jobs repeats the above results, showing a higher stability of job episodes in Germany, since around 30 percent of all graduates keep their first job. In Britain, the first five years are much more 15

20 turbulent for most graduates, because only about 17 percent of the graduate population keep their first job and roughly a quarter have at least three different jobs. This description again demonstrates that the occupation-specific training in Germany guarantees a smoother labour market entry with higher job stability and fewer job shifts. Nevertheless, it does not take into account the quality of the labour market mobility in both countries, which should differ according the institutional linkages between higher education and labour markets. Figure 3: Number of jobs since graduation in Germany and Britain 35 Number of jobs since graduation Percentage of graduates Germany Britain Number of jobs (full-time and part-time) Data: SOEP, NCDS/BCS70, author's estimations The distinction between different forms of mobility gives an insight into the sources of career instability. Mobility after job shifts is possible, if the EGP class of the next job is higher or lower than the one previously held. But also no mobility is possible, if a graduate finds a new job in the same EGP class as before. Figure 4 reveals the country differences of job mobility patterns during the first five years after graduation. Again, Germany is marked by higher stability than Britain. Almost half of all occurring job shifts take place within the same EGP class, which does not necessarily mean that the occupation stays the same, but that the class of the occupation does not differ, while the likelihood of changing the occupational class is comparatively low. In Britain, almost 50 percent of graduates experience job shifts with downward mobility, but also upward mobility occurs more often than in Germany. Thus, British graduates are more likely to lose their job and consequently find employment in a different occupational class to the previous one. Looking at the EGP class of the previous job held reveals that the observed country mobility patterns are rather equally distributed across classes. But here again it is noteworthy that British career mobility is much more turbulent and flexible. Obtaining an EGP class I job in Britain is by no 16

21 means a guarantee that further jobs are likely to be in the same class. To the contrary, only 15 percent can maintain their occupational status, while the rest face downward mobility. Even though this guarantee is not given in Germany as well, downward mobility occurs at a much lower scale. The same holds true for upward mobility, where British graduates in lower class positions have a much higher chance of moving up the occupational ladder than their German counterparts. Figure 4: Upward and downward mobility after job shifts in Germany and Britain 100% 80% 60% 40% 20% 0% Germany Britain Germany Britain Germany Britain Germany Britain as percentage of all job shifts no mobility downward mobility upward mobility all jobs previous EGP class I previous EGP class II previous lower classes Data: SOEP, NCDS/BCS70, author's estimations By and large, the analysis of mobility patterns during the first five years after graduation has shown that German higher education graduates are facing a more stable career development marked by fewer job shifts as well as less upward and downward mobility. Previous employment positions are no guarantee for upward mobility, but strongly influences further positions held. In Britain, one can speak of a turbulent transition regime, since graduates are changing their jobs many more times, and upward and downward mobility is common. Moreover, previous employment positions hardly influence the class of subsequent jobs. In short, German graduates, notwithstanding existing job mobility, remain in their occupation and class, which is in line with the argument that occupation-specific skills are highly transferable between firms, but not between occupations in occupationally structured labour markets (Gangl 2002, Marsden 1990, Marsden 1999). Their British counterparts, on the other hand, experience strong mobility between occupations, which is the result of a less occupationspecific training in combination with highly flexible labour market structures. 17