Firms are important gatekeepers for the transition from school to dual VET (Kohlrausch 2012). The hiring decisions of firms structure the transitions and determine which youths enter the dual VET system. In recent years, two trends can be observed in the transition from school to vocational training in Germany: On the one hand, the transition is becoming increasingly difficult for young people with a lower secondary school leaving certificate or less (Kleinert/Jacob 2012), and on the other hand, the number of young people starting vocational training with Abitur (highest German school-leaving certificate which acts as university entrance certificate) is rising (Bundesinstitut für Berufsbildung 2022, p.177).

So far, little is known about the role of firms in these trends. This study addresses this gap. The aim is to investigate which firm characteristics contribute to the fact that graduates with Abitur or lower secondary school graduates are hired as apprentices.

The results of my analyses are of interest for all European countries with a VET system since it widens the knowledge about the mechanism driving inequality between apprentices. My findings help to understand how firms influence the inequalities between young people with different school-leaving certificates which are often linked to the individual social and migration background.

The qualification structure of a firm should influence which school-certificates newly hired apprentices have. Firms with higher levels of human capital are more productive (Crook et al., 2011) and should have higher requirements for the human capital resources and thereby productivity of their hired apprentices. Youngsters with Abitur who spend more time in school invested more and acquired more human capital (Becker, 1964), can signal with their certificate a higher productivity (Spence, 1973) and hence are more likely to meet the high requirements of highly productive firms.

Furthermore, firms search for apprentices who fit into their team, e.g. concerning their age (Imdorf, 2012) or their migration background (Imdorf, 2010). The fit between employees concerning their qualification background and hence their productivity might be a further dimension firms keep in mind when hiring apprentices. Employees with a university degree and apprentices with Abitur share the same school-leaving certificate and are more equal than employees with a university degree and apprentices with a lower or medium school-leaving certificate. Taking both argumentations together, I argue that firms with a share of employees with a university degree hire more apprentices with Abitur.

Recently firms in Germany suffer under unfilled training positions which makes it more difficult for them to secure their demand for skilled labour (Leber and Schwengler, 2021). Firms can meet this problem by withdrawing from dual training and hiring skilled employees from the external labour market. However, this startagy implies that the firms loos the advantage of dual VET and only works if enough skilled labour is available on the external labour market. Another possibility of firms is reducing the requirements for the school-leaving certificate.

The training strategy of firms influences training decisions. Theoretically one can distinguish two strategies: the production- and investment-oriented strategy (Lindley, 1975; Merrilees, 1983). I argue that firms following an investment-oriented strategy depend on apprentices not leaving the firm after training to secure their investments. However, apprentices with Abitur might leave the firm after training to study at an university. So, I assume firms following an investment-oriented strategy to hire less apprentices with Abitur. In contrast, firms following a production-oriented strategy are not dependent apprentices staying in the firm after their graduation. Instead that they prefer to hire school-leavers with Abitur because they are more productive, need less instructions and hence generate higher returns for the firms.

This study uses data from the BIBB Training Panel, which is based on a random sample and is representative of German firms with at least one employee subjected to social security contributions (cf. Friedrich and Lukowski, 2023 (im Erscheinen)). I use a longitudinal data set covering the years 2011 to 2019 (cf. Friedrich et al., 2022). Even though the data of the BIBB Training Panel is also available, I have decided to not include later years because of the Corona Pandemic which also effected the VET system in Germany (cf. Bundesinstitut für Berufsbildung, 2021) and may bias the effects I am interested in. To analyse changes in VET within one firm I only keep firms which at least trained apprentices twice during this period. The final data set includes 12,890 observations from 3,622 training firms with between 792 and 2,124 observation per year. Their firms participated on average in 3.5 und up to 9 waves of the BIBB Training Panel. I use fixed-effect models to estimate the effects of my dependent variables which are the share of high qualified employees, unfilled training-positions (with a time lack of two years) and training motives of the firm. Since I use a fixed-effect models the effects I found can be interpreted causally.

The preliminary results indicate that the higher share of high qualified employees, the higher is also the share of newly hired apprentices with Abitur. In contrast, the higher the amount of unfilled training positions, the higher is the share of newly hired apprentices with a lower secondary school-leaving certificate. Concerning the training motives, I find that firms following an investment-oriented strategy higher more apprentices with a lower secondary school-leaving certificate. My results show that firm characteristics influence the chances young people with different school-leaving certificates to enter a dual VET in Germany. For further research it would be interesting if the same is true for other countries with a VET system such as Switzerland. In addition, my analyses help on the one hand to identify why young people with a lower secondary school leaving certificate have problems finding a training place and on the other hand which firms give them a chance. Since these young people often have a migration background and a lower socioeconomic status, integrating them via dual vocational training could help increase diversity in firms. This knowledge might not only help to improve the German but also other VET systems.

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