Why Does the German Training System Work: The Incentives that Drive the German Apprenticeship System.

The German apprenticeship scheme comprises formal in-company training for practical experience with a day-release mechanism for theoretical training in schools. The success of this 'dual' system provides benefits such as a high proportion of skilled workers in the labour force, enhanced productivity and competitiveness, easier transition from school to work, low youth unemployment rates, and the integration of school leavers of all ability levels into the apprenticeship system. This article examines the underlying incentive structures of the dual system to reveal how incentives work and which ones are most effective. The first section of the article examines why the apprenticeship system is attractive to school leavers of all ability levels and which incentives exist for employers to train apprentices. The author then describes the system of quality assurance which ensures high quality training and maintains the appeal of the apprenticeship system, how apprenticeship schemes are updated to reflect modern standards, the means by which smaller companies cooperate to cater for a broadened curricula, and the ways in which low achievers are integrated. In conclusion, the flexibility of the apprenticeship system over the last two decades is outlined.