THE GERMAN DUAL TRAINING SYSTEM FROM A FINNISH PERSPECTIVE - DIALOGUE DESPITE DIFFERENCES

MUTUAL LEARNING PROGRAMME: PEER COUNTRY COMMENTS PAPER FINLAND THE GERMAN DUAL TRAINING SYSTEM FROM A FINNISH PERSPECTIVE - DIALOGUE DESPITE DIFFERENCES Peer Review on The dual training system Integration of young people into the labour market Germany, 24 25 September 2012 A paper submitted by Timo Spangar in consortium with GHK Consulting Ltd and CERGE-EI Date: 10/09/2012

This publication is supported for under the European Community Programme for Employment and Social Solidarity (2007-2013). This programme is managed by the Directorate-General for Employment, Social Affairs and Inclusion of the European Commission. It was established to financially support the implementation of the objectives of the European Union in the employment and social affairs area, as set out in the Social Agenda, and thereby contribute to the achievement of the Lisbon Strategy goals in these fields. The seven-year Programme targets all stakeholders who can help shape the development of appropriate and effective employment and social legislation and policies, across the EU-27, EFTA- EEA and EU candidate and pre-candidate countries. PROGRESS mission is to strengthen the EU contribution in support of Member States' commitments and efforts to create more and better jobs and to build a more cohesive society. To that effect, PROGRESS will be instrumental in: providing analysis and policy advice on PROGRESS policy areas; monitoring and reporting on the implementation of EU legislation and policies in PROGRESS policy areas; promoting policy transfer, learning and support among Member States on EU objectives and priorities; and relaying the views of the stakeholders and society at large For more information see: http://ec.europa.eu/social/main.jsp?langid=en&catid=987 The information contained in this publication does not necessarily reflect the position or opinion of the European Commission.

CONTENTS 1 LABOUR MARKET SITUATION IN THE PEER COUNTRY... 3 2 ASSESSMENT OF THE POLICY MEASURE... 4 3 ASSESSMENT OF THE SUCCESS FACTORS AND TRANSFERABILITY... 6 4 QUESTIONS... 7 ANNEX 1: SUMMARY TABLE... 8

1 LABOUR MARKET SITUATION IN THE PEER COUNTRY This paper has been prepared for a Peer Review within the framework of the Mutual Learning Programme. It provides information on Finland s comments on the policy example of the Host Country for the Peer Review. For information on the policy example, please refer to the Host Country Discussion Paper. The employment situation on the Finnish labour market improved steadily after the crisis of the early 1990s. The decrease in unemployment continued until the crisis of 2008 that hit mainly the export industries in Finland. As a consequence the unemployment rate started to rise again from the level of about 6 % in 2008 to about 9 % in 2009. After a relatively short and rapid growth the unemployment rate declined. Currently the unemployment has ceased to improve. In July 2012 the unemployment rate was 6.9 % being the same as in July 2011. The crisis of 2008 resulted in a rapid rise of youth unemployment. In 2009, the unemployment rate in the age group 20 24 rose to 16.4 % increasing by 3.5 percentage points compared to 2008. The youth unemployment rate in March 2010 was as high as 36.5 % in the age group 15 19 and 20.4 % in the age group 20 24. In July 2012 the seasonally adjusted unemployment rate for young people under 25 was still 17.8% 1. The 2008 crisis also caused the NEET (the share of young people not in employment nor in education or training) issue to rise on the political agenda. F. For youth aged 20 24, the NEET rate jumped from 12.3 % in 2008 to 15.1 % in 2009. The most obvious reason for this is that the drop-out rates from secondary education are relatively high. On the Finnish labour market, there are 110.000 young people without any vocational training and about 40.000 young people under the age of 30 outside employment or training. It may now be estimated that, based on the average amount of the labour market support (25,64 /day in 2010) and the general housing allowance (258,90 /month), the total costs of the social exclusion of young people reach 300 M per year 2. 2 ASSESSMENT OF THE POLICY MEASURE Youth unemployment and measures to be taken to prevent social exclusion of the young people have become top priorities (after the Eurozone problem) on the Finnish political agenda. To a great extent, this has been an implication of the rapid increase in youth unemployment after 2008, the worrying NEET figures and the new rise of the drop-out problem of the secondary education. The most crucial difference between Finland and Germany regarding VET is that the Finnish VET system is dominantly school-based. VET is taken up by most of the pupils after the 9 years of compulsory general education and takes three years of full-time study. Apprenticeship training, for its part, has in Finland traditionally been a method for continuing and further training. Thus, the apprenticeship training is mainly for the adults and therefore the share of young people in apprenticeship training has been relatively low, approximately 5 %. However, developing more work-based VET, enhancing closer ties among working life and school-based vocational training, as well as bridging the gap between theory (emphasised in the vocational schools) and practice (emphasised by employers and working life) have all become topical issues in Finland. Better integration with working life and better 1 Eurostat. News Release 31.08.12. 2 Nuorten yhteiskuntatakuu (in Finnish). Youth guarantee. Reports of Ministry of Employment and the Economy 8/2012, p. 19. 4

integration of the theoretical and practical studies trigger motivation of young people for the vocational training. Thus, developing more work-based VET is also seen as a method for supporting the young in their transition from school to work and from youth to adulthood in general. In this context, forms of vocational training that emphasise learning by doing and apprenticeship training in particular- have gained renewed attention as a method for integrating young people with special learning and employment challenges, as well as a more general alternative to the prevailing school-based VET system. In Finland there are curriculum-based measures supporting young pupils transition to vocational education, which could be compared to German pre-training schemes. In upper comprehensive schools, the curriculum includes one-day workplace visits in the 7th and 8th grade at the age of 13-14 years. In 9th grade pupils are afforded an opportunity for a two week (maximum) internship at real workplaces. In Finland, guidance is provided by student counsellors for all pupils in upper comprehensive schools as well as during the initial vocational training. In addition, flexible general education curriculum aims to prevent social exclusion and enhance the academic skills of a young at risk of underachievement or exclusion from VET. The flexible general education curriculum emphasises the learning-by-doing pedagogy and pupils are provided with multi-professional help by teachers and social and health workers to build a tailored career plan. In the academic year 2010 2011, about 1250 pupils benefited from the flexible general education curriculum 3. With the new Youth Guarantee programme, it may be assessed that the number of municipalities (responsible for provision of general education) adopting such flexible curriculum will significantly increase from 2013 onwards. Furthermore, there are two major in-between schemes for supporting the transition from basic compulsory general education to vocational education. The 10th grade ensures that all the pupils get the compulsory school certificate affording support for upgrading the academic scores, short work try-outs and personalised careers guidance. The Career Start programme (ammattistartti), piloted since 2006, is organised by vocational schools and, like the 10th Grade also includes intensified hands-on guidance, work try-outs and learning by doing. The career start programme aims at an individual transition plan to education or work. 4 In 2010, 49 VET institutions were granted a permission to organise the Career Start Programme. The programme lasts between 15 and 40 study weeks, with 5-15 study weeks devoted to career planning skills and work experience. In the pilot phase, about 800 pupils in 33 VET institutions benefited from the programme. In addition to these, there are two other common in-between schemes in Finland such as the six-month household economy training providing young people with general lifemanagement skills and the courses provided by the folk high schools lasting 3-4 month up to 1 year. Once a young person registers as a jobseeker in the Public Employment Service he/she becomes eligible for preparatory labour market training where individual guidance and counselling is the core method. A young job-seeker may also be referred to the youth workshops, based on productive work within the workshops and including individualised counselling. In 2009, 11.300 young people under the age of 30 attended youth workshops. About 75 % of them started education, found a job or initiated some other active labour market measure while originally 67 % of them lacked any vocational education 5. 3 http://www.tem.fi/files/31106/yhteiskuntatakuu181011_ville_heinonen.pdf 4 Nevala, A.M (2009). What works in moving early school leavers towards participation in learning or employment: a brief comparison of practices in Slovenia and Finland. Peer Review on Project Learning for Young Adults: A social integration programme helping young people back into work and education. Slovenia, 2-3 November 2009 5 http://www.kunnat.net/fi/asiantuntijapalvelut/opeku/kulti/nuoriso/tyopaja/sivut/default.aspx 5

The most important policy measure in Finland tackling the double concern of promoting vocational skills and social inclusion of young people is the Youth Guarantee (YG). While the concept of the YG originally goes back to the 1980s, having been implemented in PES since 2005, the new YG coming into effect at the beginning of 2013 is a much more holistic policy measure than earlier efforts, integrating employment and educing 35ation policies as well as the work of public authorities, also regionally and locally. The Finnish model of implementing the YG is labelled as public-private-people-partnership 6 reflecting the active participation of young people and social partners. The Government has allocated additional 60 million euros for the implementation of the YG and the Ministry of Employment and the Economy is currently starting a road show in all the Centres for Economic Development, Transport and the Environment (the regional body of PES) to advertise the YG 2013. The YG 2013 will include various actions and measures to be taken. The main features are: A guarantee by the PES to make the initial interview of the young person within two weeks after the start of the unemployment spell, a guaranteed offer of a job, on-the-jobtraining or a workshop period or rehabilitation within three months All school leavers are guaranteed a place in upper secondary education, vocational education, rehabilitation or apprenticeship training Improved contact with young people by making the youth outreach work nationwide (having not covered all the municipalities so far) and increasing the guidance staff within PES Strengthened support for the employers by making the piloted Chance Card nationwide (wage subsidy of about 650 euros for employing young jobseekers) and by raising the apprenticeship subsidy for the employers to 800 per month. The YG 2013 plan also includes proposals for increasing apprenticeship training for young people. 3 ASSESSMENT OF THE SUCCESS FACTORS AND TRANSFERABILITY All in all, reflecting on similarities and differences between Germany and Finland, although the German and Finnish VET systems are quite different, there certainly are themes and issues shared by both countries. There is a concern in both countries that the participation rate in secondary education (95% in Finland) should still be enhanced and, perhaps most importantly, that the educational system should seamlessly produce the vocational competences that young people need in the labour market thus ensuring their participation in society at large. There are also several similar interests and concerns regarding VET and measures to prevent social exclusion. First, the need of improved contact with young people is reflected in both countries through various methods for more intensive guidance and counselling. This is directly linked with the public authorities capacity of reaching the target group. Second, both countries seem to look for new methods of strengthening employers participation in VET and in apprenticeship training in particular. Third, there is a shared understanding that a wellperforming VET and smooth transitions from basic education to vocational education and working life call for special attention to the low skilled and disadvantaged groups. The German miracle with the exceptionally low youth unemployment figures certainly draws attention of Finnish policy makers and researchers, and of course would be gladly followed. However, it currently seems unlikely that Finland would, at least in the short-term, easily adopt the German emphasis on the apprenticeship training. The traditional full-time, school-based VET institutions are a strong conservative power and the idea of shifting the 6 Winqvist 6

emphasis towards apprenticeship as the core method of VET may be assessed as too radical at the moment. However, as one step in this direction, the new YG 2013 may be seen as an effort to raise the importance of apprenticeship training and the share of the young people within it. Reflecting on the Host Country paper, the most important lesson for Finland to reflect upon is the obvious willingness of German employers to actively participate in apprenticeship training. German employers seem to position themselves clearly in a more proactive role than Finnish employers although there have been ups and downs in this regard also in Germany. The German National Pact for vocational training and promoting next generations specialists agreed with the social partners could be one interesting road to be followed in Finland. Currently the debate between the Finnish Government and employer organisations seems to be jammed in cost-sharing issues. The German apprenticeship system also raises for Finland the question of when and in which context young people should develop labour market exposure. In Finland, the steps in the transition from school to work are characterised as basic general education (with limited contact with working life), initial vocational training (with somewhat more lengthy internships), graduation and finally job search. In many ways, the logic of train first has turned out problematic as it inevitably entails the risk of unemployment and even social exclusion. The German dual system, as an alternative logic, challenges Finland to develop methods of early matching. There seems to be a need for innovating methods of exposing Finnish youngsters to working life earlier. In Finland, there are some lessons to be learned from the efforts to enhance the commitment of young people to overcome their own employment and educational challenges: First; successful measures support, in a genuine manner, authentic dialogue with youngsters based on the unconditional acceptance of the human dignity and natural creativity of young people. This should be characterised by a non-normative approach to young people enabling win-win negotiations. At the same time, individual proactiveness should be supported by peers and others. Secondly, investing in mediating and coordinating processes among all players is vitally important. Thirdly, and related to the second point, there is a need for catalysing the different policies and players to act as a conscious part of the whole orchestra, each one of them lending their resources at the youngsters disposal. Providing these conditions are met in the future, measures like the Finnish YG will be endorsed by young people themselves which would be a core success factor. 4 QUESTIONS Why do German employers favour apprenticeship training as the main form of vocational training? What is the wage level of apprentices and the compensation to employers? What is the role of the vocational schools and how has it developed during the last few years? How is guidance and counselling organised at different levels of education and within PES? In the Host Country paper it is mentioned that those job-seekers who are searching for training are not registered as unemployed. Has this an effect on the German youth unemployment figures? 7

ANNEX 1: SUMMARY TABLE Labour market situation in the Peer Country The 2008 crisis caused a rapid rise of youth unemployment, currently standing at 17.8 %. Youth unemployment affects the low-skilled, as tertiary education graduates are not affected. The 2008 crisis brought the NEET issue onto the political agenda. The most obvious reason for this is that the drop-out rates from the secondary education turned out unexpectedly high. Assessment of the policy measure The Finnish VET system is predominantly school- based; apprenticeship training is mainly a method for adult vocational training although there have been efforts to increase the share of the young in apprenticeship training. Learning by doing and apprenticeship have gained renewed attention as a method for integrating youngsters with special learning and employment challenges. There are some curricula-based measures and measures to ease transition from basic education to VET in Finland. The Youth Guarantee is the most important policy measure in Finland tackling the double concern of promoting vocational skills and social inclusion of young people. Assessment of success factors and transferability The German miracle and dual system is difficult to transfer in Finland. The German success story is the employers commitment to the dual VET system, providing Finland with lessons to be learned. Fostering dialogue with young people, investing in mediating and coordinating processes, and catalysing joint stakeholders efforts, are identified as success factors. Questions Why do German employers favour apprenticeship training as the main form of vocational training? What are the rules of the game: What is the wage level of the apprenticeship trainees and what is the compensation to the employers? What is the role of the vocational schools and how has it developed during the last few years? How is guidance and counselling organised at different levels of education and within PES? In the Host Country paper it is mentioned that those job-seekers who are searching for training are not registered as unemployed. Has this an effect on the German youth unemployment figures? 8