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Transitions from Education to Work in EuropeThe Integration of Youth into EU Labour Markets$

Walter Müller and Markus Gangl

Print publication date: 2003

Print ISBN-13: 9780199252473

Published to Oxford Scholarship Online: January 2005

DOI: 10.1093/0199252475.001.0001

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The transition from school to work: a European perspective

The transition from school to work: a European perspective

(p.1) 1 The transition from school to work: a European perspective
Transitions from Education to Work in Europe

Walter Müller

Markus Gangl (Contributor Webpage)

Oxford University Press

Abstract and Keywords

Serves to set the stage for the substantive analyses provided in subsequent chapters. We outline a broad social science perspective on individual, structural, and institutional determinants of school-to-work transitions and define the cross-national comparison as our prime focus of interest. Consequently, we emphasize institutional explanations and in particular discuss the role of cross-national differences in training systems and labour market structures. Against that background, the chapter also discusses the scope of the book’s empirical chapters.

Keywords:   educational system, europe, institutions, labour market entry, labour market structure, school-to-work transitions

The transition from school to work represents a central stage in the lives of individuals. It is conventionally understood as the period between the end of individuals' primary involvement in education or training and their stable settlement in a work position. School leavers have to find a workplace in which their qualifications can be properly used and which provides fertile ground for their future occupational or professional development. And although the transitional stage is only the beginning of a thirty- to forty-year working life, many studies have emphasized that initial job outcomes are highly influential in shaping the further development of work careers. Hence, a smooth transition into the labour market for young people may minimize experiences of unemployment and idleness, but may also generate lasting positive consequences for their subsequent working lives.

From a macro-level perspective, the pattern of individual transitions mirrors the integration of young people into the world of work. It reflects continuity and change in the societal division of labour and the broader system of social stratification. An important issue is the efficient use of talents and human resources. How are individual qualifications and preferences matched to job requirements? But there are other elementary social processes, such as partnership or starting a household or family that frequently take place concurrently with, and also in connection with, the transition from school to work. It is precisely the fact that many critical events accumulate during this stage that renders transition processes between school and work very important in shaping the social stratification of modern societies.

Over the past decade, embarking on working life has increasingly come to be seen as more varied and less standardized, at least in comparison to the smooth transitions from full-time education to full-time employment so typically experienced by young men during the post-war economic boom. In fact, the employment turbulence of the past two decades has also left its imprint on (p.2) the labour force experiences of those starting their working lives. Often it is assumed that transition processes have been prolonged and that nowadays it takes young people longer to establish themselves in the labour market than was the case earlier. Between leaving full-time education and arriving at a stable position in the labour market, young people may experience extended or repeated periods of unemployment, joblessness, or attachment to marginal forms of employment. More frequently than before, they return to education or training and pass through successive schooling and working episodes. Many deliberately take time out between education and work for leisure, travelling, or other experiences before being subjected to the routines and constraints of working life.

The reasons for more varied transition patterns are certainly multifaceted. However, the transition patterns and career uncertainties deriving from slack labour markets are generally seen as problematic and experienced as stressful by young people and their families. Indeed, experiences of economic uncertainty may entail more long-term consequences than are apparent at first sight. Menial jobs initially taken lightheartedly may turn into traps involving long-term attachment to the secondary sector of unstable, contingent, and badly paid work. Early unemployment experiences may be more generally indicative of future labour market problems, notably future unemployment. Opportunities to build up work skills neglected at the early stage of training careers may be difficult to obtain at a later stage. Also, the stratification of such transition experiences may have undergone fundamental changes. On the one hand, declining gender differentials in educational attainment are likely to lead to a reduction of gender differences in initial labour market outcomes, in longer-term job histories, and also in the relative economic position of men and women. On the other hand, and particularly in conjunction with tightening labour markets, these equalizing tendencies may be offset by increasing difficulties for ethnic minorities or for the lowest qualified school leavers.

The present volume takes up these and related concerns with a comparative view of present-day European Union countries. There are a number of good reasons for this perspective. First, while there have been considerable research efforts in many European countries, systematic evidence on the whole of the European Union is still scarce and the variety of empirical transition patterns is hence likely to have been underestimated. We still have little systematic evidence about the structure of transition processes in different European countries or about their changes over time. Hence, the empirical analyses presented in this volume first of all pursue the question of whether, how, and to what extent youth transitions differ between different European countries. In addition, the European integration process provides a natural second layer for all our analyses. Are transition processes in European countries evolving (p.3) towards a common structure of school-to-work transitions in an integrated Europe or towards a perpetuation of nationally specific institutions and the particular transition patterns associated with them?

In this comparative endeavour, we pursue a specific micro–macro model of analysis. We assume there are common, basically similar social processes underlying transition processes in the different countries: the individual actors primarily involved—school leavers and their families, on the one hand, and potential employers on the other—have basically similar aims and similar resources relevant in achieving satisfactory transitions from education into working life. Also, we assume that the general mechanisms that lead to job–person matches between an individual school leaver and a job or a series of successive jobs are basically the same in the different countries. However, the institutional and structural conditions under which decisions are made by individual actors can vary substantially over time and between countries. What we thus need to understand is the interplay between the contextual conditions in which decisions are made and the aims, resources, and mechanisms that guide the decisions of individual actors. To understand why countries are similar or why they differ from each other, we need to know more about both the basic mechanisms behind transition processes and the contextual conditions that affect the operation and outcomes of labour market processes. We will certainly not be able to provide all the answers in this book. Rather, our intention is to contribute some of the pieces in the puzzle and thus take a step forward towards a better understanding of what is common in transitions from education to work in Europe, where we find variation, and why this should be the case.

The vast general programme to which we hope to contribute can be broken down into a number of more specific and more concrete issues. Descriptively, our interest focuses primarily on the aggregate effectiveness of labour market integration in particular countries. How long does it take for a cohort of entrants to become settled in the labour market and what kind of employment patterns dominate their experiences of the transition process? How have transition patterns changed over time and how does labour market integration vary across countries? Alongside purely descriptive concerns, we also provide analyses on the mechanisms behind observable transition experiences. Which factors determine whether transition patterns are smoother or more problematic? What are the main resources of individual actors and how are they transformed into job outcomes in the transition from education to work? Evidently, education and training is a key individual resource on entry into working life. Accordingly, a considerable part of our analyses will be devoted to the role of qualifications in shaping transition processes. We investigate how qualifications affect job outcomes such as the ease of finding initial jobs, the duration of joblessness and unemployment in the transitional stage, the (p.4) risk of recurrent unemployment, or the length of time it takes to find relatively stable employment. Further, we ask how the qualifications obtained affect the quality of the job in terms of socio-economic status, unskilled, skilled, or professional employment, and social class. What are the characteristics of qualifications that matter most? Is the level (and duration) of education and training received more important than whether training has been general or vocationally oriented? What is the relevance of qualifications compared to other crucial resources or individual characteristics such as gender, social background, ethnic, identity, or family and other social networks?

Our focus on qualifications also suggests a particular perspective on cross-national differences in transition processes. Any description of education and training systems in Europe provides evidence of continued and important institutional differences between European countries in this respect. Over and against the more micro-level issues raised before, a more macro-level perspective in this book investigates the impact of these institutional differences on cross-national differences in transition patterns from education to work. Hence, we will be describing the extent to which the qualifications background of young people entering the labour market differs between European countries. At the same time, however, we ask whether differences in institutional arrangements are pervasive enough to generate systematically different transition steps and outcomes in different countries. If so, what are the core characteristics of the institutional arrangements affecting the routes and experiences of school leavers while moving into employment? Which systems perform best in integrating young people into the labour market? And how do different institutional systems of youth labour market integration respond to ongoing structural changes in the economy, that is, what bearing do educational expansion, occupational change, or business cycle variation have on young people's opportunities for obtaining various kinds of employment in different systems?

Youth labour markets have come under strain in Europe. Structural changes in labour markets and mass unemployment have affected all countries, although to varying degrees and with varying long-term consequences. To offset these difficulties, the various countries have taken different measures designed to improve transition processes between education and work for young people. Public policy and national collective actors have followed both proactive and remedial strategies by strengthening those elements in education and training systems that were held to favour smooth transitions of young people into working life. In addition, they have introduced types of labour market regulation expected to facilitate the integration of school leavers into employment. They have also established specific labour market programmes and measures to integrate the most disadvantaged young people. Which groups are still at risk, despite these reforms and measures? Are they the same in (p.5) the various countries or do different systems need different policies to prevent and/or mitigate the perils involved in the ongoing transformation of the world of work in future?

With questions like these, the present volume is intended as a coherent inquiry into the empirical structure of school-to-work transitions in Europe. Its chapters describe different aspects of transition processes as they have developed in recent years and at various points offer explanations of why it is that we find certain phenomena in the different countries of Europe. The book thus attempts to assess both variation in transition patterns among the countries of Europe and their changes over time.

1.1. Transition processes: a micro–macro perspective

Any discussion of transitions from education and training systems into working life will necessarily involve both the macro and the micro level. At the micro level, individuals experience transition processes as a series of events that arise from individual expectations and action, on the side of both the worker and the potential employer. Hence, microsociological and microeconomic matching models of the labour market can readily serve as the starting point of transition research. Matching models describe the outcomes of two-sided allocation decisions as resulting from the interplay of opportunity structures and actor preferences (see Kalleberg and Sørensen 1979; Granovetter 1981; Coleman 1991; Logan 1996). According to matching models, individual job matches will form if employers perceive suitable job applicants for the particular position in question against the alternative of non-contracting and, at the same time, young applicants consider job conditions appropriate over and against the alternative of unemployment or continued participation in training activities. Plausibly, young people leaving the educational system strive to obtain jobs promising adequate returns for their investments in education, be it in terms of job quality or monetary and non-pecuniary rewards or in terms of using the first job as a stepping stone to better employment in future. Employers, for their part, can be expected to recruit those applicants they consider to be both most productive and least costly for the kind of work required by the job. The overall outcome of such joint decision and allocation processes will then be reflected in the social stratification of transition processes by factors like skills, gender, or ethnic background.

However, even a purely micro-level approach to youth transitions would readily acknowledge the importance of contextual factors at the macro level. Individual expectations and actions are always affected by particular (p.6) macro-level opportunity structures, mainly defined by the jobs available in particular occupations, industries, or regions for young people with particular qualifications and other resources. Furthermore, individual expectations and actions are dependent on stable institutional settings such as the education and training institutions, more or less formal requirements for entry into particular jobs, or regulations governing the rights and obligations of workers and employers. In principle, individual decisions and actions may be determined by regularities that are quite similar in all countries. But between countries or across time the macrostructural conditions or institutional settings may vary, so the decisions taken and outcomes of action may vary as well. Accordingly, comparative analysis represents a natural context for more macro-level assessments of transition patterns.

At the macro level, transition patterns can be seen as reflecting the cumulative experiences of cohort members leaving the educational system for the labour market. In contrast to purely micro-level accounts, the core of research interest then concentrates on the aggregate effectiveness of youth labour market integration in different institutional contexts, rather than the explanation of individual variation in transition outcomes and sequences. Typically, this approach begs a number of questions. How long does it take for a cohort of entrants to get settled in the labour market, and what kind of employment patterns dominate cohort experiences in the transition process? What is the quality of jobs obtained and how does job quality respond to changing structural contexts in labour markets and training systems? What kinds of jobs are taken by those entering the labour market, as compared to jobs held by more experienced workers? And can cross-national differences on these measures be credibly related to cross-national variation in institutions and the macroeconomic context?

A more macro-oriented framework of this kind may also be appropriate for the simple reason that, as in competitive labour markets generally, young people's job outcomes on entry into the market will only partly depend on their own educational and other resources. A first source of contextual variation in outcomes is of course related to (local) labour market conditions. When entering the market, young people may face periods of slack labour demand and hence have considerable difficulty finding employment. However, the fact that by definition young people are first-time entrants to the labour force may render their labour market status particularly vulnerable. First of all, young people necessarily lack work experience and will typically need a certain level of on-the-job training, so that employers might prefer to recruit more experienced workers for the vacancies they have. More generally, employers may be particularly reluctant to hire young people if they see little connection between the skills taught in education and training and those required at work (Bills 1988, 2002; Rosenbaum et al. 1990). Finally, individual job outcomes (p.7) will also depend on the resources of young entrants to the labour force in comparison to the level of labour market resources acquired by the cohort at large. For example, the acquisition of entirely respectable qualifications may not guarantee the anticipated stable transition into working life. School leavers may find themselves in situations where, although they have individually acquired decent qualifications, they find those qualifications devalued upon entering the labour market by virtue of the fact that many others have made the same educational choices (Boudon 1974; van der Ploeg 1994; Erikson and Jonsson 1996).

The range of questions addressed thus reminds us that there are various dimensions to the question of the integration of young people into the labour markets. Integration can be more or less successful and effective in different individual dimensions. Also, arrangements and conditions existing in different countries may be built on different national traditions and are often difficult to change. This should suffice to indicate that we are not adopting a ‘one best system’ approach. At this stage the task is rather to improve understanding of the interplay of factors operating at different levels and their effects in the different structural and institutional contexts in which transitions take place.

Against this background, a central interest of transition studies is to assess empirically the specific position of new entrants in the competition for jobs and to address the significance of particular educational, network, or other resources for transition patterns and outcomes, as well as the role of gender, ethnic, or other group characteristics. From a comparative perspective, we are additionally bound to recognize the existence of structural and institutional differences between countries that may affect youth transitions in Europe. As a preface to the main chapters of the book, we describe in the following sections how some of the essential structural and institutional features vary between countries or have changed over time.

1.2. Structural contexts of transition processes

Countries differ in terms of labour market conditions, industrial structure, population skill levels, and youth cohort sizes. To the extent that these and other structural conditions affect transition outcomes, cross-national differences will translate into national differences in transition patterns between education and work. Macroeconomic conditions are perhaps the most relevant factor here. As is evident from Labour Force Survey data given in Figure 1.1, unemployment rates have varied widely between European countries over the past decade. Austria, for example, enjoyed very low unemployment rates of (p.8)

The transition from school to work: a European perspective

Figure 1.1. (a) Unemployment rates and (b) youth–adult ratios in EU countries 1985–2000.

Source: European Union Labour Force Survey 1985–2000; EUROSTAT, NewCronos Database.

less than 5 per cent over most of the decade, whereas unemployment rates in Spain have never fallen below 15 per cent and reached well over 20 per cent by the mid-1990s. Also, unemployment trends differed considerably from one country to another. While most countries experienced mainly cyclical fluctuations in unemployment levels in this period, there are clear signs of sustained economic improvement in Ireland in particular and to a lesser extent in Denmark, the Netherlands, or the United Kingdom in the mid-to late 1990s.

The experiences of young people in making the transition from school to work are particularly likely to be affected by varying contextual circumstances. If labour markets tighten, the relative position of those entering the labour market can be expected to deteriorate disproportionately, as their labour market status is still volatile and largely unprotected by employer investments, formal employment protection legislation, or union coverage. Hence, young workers are likely to bear the brunt of current job shortages to a disproportionate degree and resulting transition patterns will show an increase in the incidence of spells of unemployment or employment in temporary or marginal forms of employment. Likewise, young people still in the education and training system can be expected to respond to labour market difficulties by extending their own educational careers in order to counter the threat of unemployment when entering the world of work (Gambetta 1987). Whatever the extent to which macroeconomic conditions translate into specific labour market risks for school leavers, the wide variety (p.9) of macroeconomic conditions across European countries is likely to produce correspondingly wide cross-national variation in transition patterns.

Other contextual factors conceivably affecting school-to-work transitions show more uniformity across countries and indicate similar developments over time. Hence, they are more likely to contribute to the analysis of changing transition patterns than to reveal much about the sources of national differences in transition processes. Youth cohort sizes are one contextual factor widely held to be of crucial importance in understanding early career processes (Macunovich 1999). They have declined considerably in almost all European countries (see Figure 1.1), so that demographic pressures on youth labour market outcomes should have tended to decrease over the past decade. By contrast, levels of education have risen greatly in all European countries and such rises are likely to imply devaluation processes for particular qualifications and credentials that at an earlier stage would have guaranteed quick access to adequate employment. As a consequence of educational expansion, one would expect to see downgrading tendencies in the patterns of occupational allocation and increasing labour market difficulties for the least qualified (Boudon 1974). Educational expansion, however, has been accompanied in many countries by occupational change. Labour markets have undergone a considerable transformation towards service sector-based economies and many expanding firms and industries may provide ample job opportunities for young people (Penn et al. 1994). To the extent that educational systems proactively contribute to preparing young people for such new forms of employment, it could be those entering the market, rather than the adult workforce, who possess the skills sought after in buoyant sectors of the economy. At all events, the questions of whether, to what extent, and in which directions macrocontextual factors have affected transition processes in Europe will be empirically assessed in greater detail in the following chapters.

1.3. The institutional bases of labour market entry patterns

Structural factors are of obvious importance in explaining transition outcomes, their change over time, and respective differences between European countries. Taking account of the institutional factors involved in national differences, however, might seem to be an even more promising strategy for research. Institutions are central to cross-national research, as these characterize the regulation of particular actions in a given society, which are typically found to be more stable and enduring than specific structural conditions (p.10) in the labour market at a particular historical point in time. In fact, institutional rules might be expected to regulate structural change itself and hence to determine to some degree the structural contexts of transition processes by filtering and channelling economic pressures for adjustment and change or by regulating the conditions of skill acquisition in modern societies. But European countries differ markedly in terms of the core institutional arrangements regulating labour market entry. To the extent that these institutions are effective in influencing labour market behaviour, these should be among the key predictors for cross-national differences in transition patterns. As we shall see in more detail, there are important cross-national differences in both education and training systems, in the institutional structure of labour markets, in labour market regulation, and in active labour market policy in European countries. Each of these aspects can be expected to have a crucial bearing on empirically observed transition processes.

Education and training systems

At the time of entry into the labour market, qualifications are undoubtedly the key resource determining young people's individual job search outcomes (Breen et al. 1995; Müller and Shavit 1998). Hence, education and training systems are likely to exert crucial influences in shaping the experiences of young people entering the labour market because their institutional structures greatly affect individual access to educational resources. The national educational systems not only provide varying educational curricula, streams, tracks, and pathways but also determine the rules of access to the particular types of training from which young people have to choose. These decisions are framed by the family context and resources (Erikson and Jonsson 1996) as well as by the structure of education and training systems channelling young people into different streams according to individual ability and preference (Erikson and Jonsson 1996; Hannan et al. 1999a). In fact, educational decisions exhibit a prospective element to the extent that individual investments in education will be based on expectations about future rewards in terms of labour market and other outcomes (Becker 1993; Jonsson 1999). In decision-making processes, the features of education and training systems are very likely to interact both with individual abilities and the financial and cultural resources of families (Erikson and Jonsson 1996). Education and training institutions thus clearly affect the question of who receives what type of education and accordingly the level and type of educational resources at the disposal of young people ultimately entering working life. In consequence, an important concern must be that of the systematic differences between countries with regard to individual options and decisions within the educational system and before actually entering the labour market.

(p.11) As European education and training systems differ considerably in their institutional structures, these structures have considerable theoretical potential for explaining cross-national differences in transition patterns. Education and training systems provide young people with qualification resources that vary in their labour market value and their effectiveness in helping them achieve smooth transitions into the labour market. The structure of education and training systems therefore has a direct effect on cross-national differences in school-to-work transitions. Earlier work suggests that various dimensions in the setup of educational systems are of particular relevance for transition patterns and outcomes:

  1. 1. The scale of opportunities given by the distribution along different levels of educational attainment (cf. Allmendinger 1989; Hannan et al. 1999a). Those with the best education and training tend to be best off in the labour markets, whereas the poorest job prospects are usually encountered by those with the lowest levels of training. The higher the levels of training assured by the training system, the greater the improvement of transition patterns into working life that they can be expected to guarantee. The same applies, mutatis mutandis, to the lowest level of qualifications. The smaller the number of young people leaving the training systems without having achieved sufficiently applicable skills, the smaller the number will be of those destined to experience failure or major difficulty in making the transition from school to work. To the extent that levels and kinds of education condition more or less favourable transitions into working life, the scale of opportunities provided by the system and consequently the composition of attainments are core institutional factors shaping the transition process.

  2. 2. The debates on the relative advantages of general education versus vocational training and on beneficial mixes between them have been extensive and far-reaching (Allmendinger 1989; Kerckhoff 1995, 1996, 2000; Shavit and Müller 1998, 2000a,b). This is hardly surprising given that educational systems vary considerably in the extent to which they either provide more general education or include systematic vocational training as particular tracks or complementary modules in the system of education and training. The United States provides the clearest example of an educational system that is very strongly oriented towards providing general qualifications in schools with little consideration for the labour market relevance of skills taught. In Europe, most countries have established vocational training programmes as part of their education and training systems, but cross-national variation is still wide in that respect. Ireland probably comes closest to emulating the US model, as vocational training plays a very modest role at the secondary level and only gains in relevance at the post-secondary levels. Similarly, vocational training programmes in southern Europe are typically less well developed and well integrated into (p.12) the educational system than is the case in the traditionally vocation-oriented systems of Germany or Austria featuring extensive vocational training through large-scale apprenticeship programmes or, alternatively, through occupationally specific training in vocational schools, as in the Netherlands. In between these extremes, there are countries like England, France, or Sweden that rely on a mix between academic and vocational tracks and schools at the secondary level in conjunction with a small apprenticeship programme, if any. Completing a vocational training programme or track can be expected to provide school leavers with qualification resources of different labour market value from those attained by completing more academically oriented tracks. If this is so, different channelling of young people into alternative training streams and tracks will necessarily have consequences for transition patterns into the labour market.

  3. 3. In a further elaboration of vocational training, the distinction according to its organizational form—school based versus a combination of training and working—is perhaps the single dimension of training systems that has received the most attention in previous comparative research on school-to-work transitions (Allmendinger 1989; Shavit and Müller 1998, 2000a; Kerckhoff 2000; Ryan 2001). If these different types of training imply different experiences upon entering the labour market, then transition patterns will consequently vary between countries employing various mixes of training strategies. Apprenticeships are often assumed to reduce unemployment incidence in the early career stages, to achieve better matches between persons and jobs, and to reduce labour market volatility at the micro level of individual workers. If this is true, then these features should also figure prominently in a comparison of aggregate transition patterns between countries running large-scale apprenticeship systems and those that favour different training institutions.

  4. 4. Educational systems also differ in the flexibility of pathways. They provide varying opportunities to correct earlier educational decisions that have led to experiences of labour market failure by re-enrolling into educational programmes. In that sense, different educational systems allow for different degrees of indeterminacy in early decisions about individual labour market careers. Japan and Korea, for instance, appear to be extreme cases of systems that allow for only one chance and hardly provide any opportunity to return to education after leaving the system. While inflexibility is nowhere as pronounced as this in the European systems, these systems clearly vary in the extent to which they provide opportunities to return to school, pass through successive school and work episodes, or combine work and training activities. Different conditions in this respect should also find expression in observable patterns of transitions to work.

Variation in availability and accessibility of different educational and training options will lead in different countries to varying composition of the groups (p.13) of young people leaving schools and training institutions from different educational pathways and with different levels and kinds of qualifications. To understand the aggregate transition patterns and outcomes in different countries, it is important to identify both the transition implications of each major kind of qualification and the compositional effects resulting from relative shares of the various qualifications among school leavers in different countries.

The various educational options and the scale of opportunities provided by the educational systems should, however, also have a direct bearing on the social inequalities associated with the transition process, be it in terms of gender, class, or ethnic differences. To the extent that educational attainment among young people differs between young men and women, between children from different class backgrounds, or between young people of different ethnic backgrounds, these educational differences are bound to produce inequalities in early labour market careers, if not lasting disadvantages in the longer term. One important question then is whether such inequalities in transition experiences and outcomes are mainly due to the groups' unequal attainments in qualifications or whether they are exacerbated by additional inequalities emerging in the transition process itself. As the current study will be mainly concerned with variation in transition patterns across European countries, our analyses will not primarily aim at addressing the extent and the sources of inequalities within countries.

Labour market structure

Many researchers interested in the effects of education and training systems on transition processes and outcomes have espoused a more comprehensive concept of the impact of training systems on transitions from school to work. In much of the current literature (and going beyond the effects discussed before), there is the additional claim that educational systems affect labour market allocation more generally and thus contribute to shaping the structure of (youth) labour markets themselves. In particular, much current research assumes that the more heavily educational systems rely on providing standardized and specific vocational qualifications of immediate labour market value to employers, the more employers will rely on education rather than tenure and experience when they make their labour allocation decisions. Arguments in this respect are advanced from the perspective of a contrast between qualificational and organizational spaces (Maurice et al. 1986; Müller and Shavit 1998), systems of internal labour markets versus systems of occupational labour markets (Marsden 1990, 1999; Marsden and Ryan 1995), or weakly versus strongly stratified educational systems (Allmendinger 1989). The basis of such claims is essentially an informational argument. Employers' hiring decisions are decisions made under uncertainty conditions because the match between job applicants' capabilities and the skills required (p.14) by the job in question is not something that can be readily determined, which means that employers face a screening problem (Arrow 1973; Spence 1973; Breen et al. 1995). Potentially, the screening problem can be solved by different sources of information about job seekers, such as on-the-job screening and probationary periods, previous individual employment records, or individual educational attainment. If employers are likely to turn to the least costly alternative providing an effective assessment of job applicants, the role of education in labour market processes will increase relative to other sources of information, at least to the extent that it provides a more reliable indication of individual capabilities. The reliability of educational signals will, in turn, be crucially influenced by the degree of standardization, stratification, and vocational specialization in educational systems (Allmendinger 1989; Breen et al. 1995; Kerckhoff 1995, 2000; Müller and Shavit 1998; Shavit and Müller 2000b).

The consequences of this effect are likely to be twofold. If education does indeed provide clear signals about individuals' skills, this will form the basis for achieving adequate job–person matches right at career outset. And if such matches can be achieved at little cost, this should contribute to eliminating the erratic job-hopping period prior to finding adequate employment that is so common among American youth (Allmendinger 1989; Topel and Ward 1992; Light and McGarry 1998). In summary, clear educational signals about individual productivity should help to make transition processes more orderly by involving less friction and less job mobility in the process of settling into the labour market. Also, from the employers' viewpoint, there is less need to develop and institutionalize firm-internal career structures, as recruitment from the external labour market into more highly skilled positions then becomes a more viable option. To the extent that this greater reliance on educational means for allocating people to jobs is actually the case, it should further imply, more generally, that young people would be at less of a disadvantage compared to the regular adult workforce. Young people entering the labour market are serious job competitors for more adult workers to the extent that, in a particular labour market, the requisite skills are predominantly defined in educational terms. By contrast, they are in a weaker position, almost by definition, if skills are mainly acquired from work experience (Ryan 2001).

Labour market regulation

Education and training systems should affect youth transitions primarily via their impact both on skill levels among young people and the role of educational certificates in labour allocation processes. Labour market regulation, on the other hand, relates to youth transitions, at least potentially, via its (p.15) effects on the structure of labour demand in the youth labour market. Labour market regulation, broadly understood, is the institutional regulation of labour contracts and the protection of existing employment relationships through formal legislation, union coverage, and collective agreements between employer associations and unions. Historically, labour market regulation has been more pronounced in Europe than, say, in the United States (Esping-Andersen and Regini 2000). But wide variation exists between European countries in the stringency of employment protection in general, the regulation of individual and collective layoffs, wage-setting mechanisms, the regulation of work hours and minimum pay, or the provisions for non-standard forms of work contracts (cf. Grubb and Wells 1993; Hartog and Theeuwes 1993; Büchtemann and Walwei 1996; OECD 1999b; Anxo and O'Reilly 2000). In general, Britain and Ireland are regularly considered to be countries exhibiting fairly low worker protection standards against market forces, whereas labour market regulation is more pronounced in continental Europe, even though the instruments differ. In addition, the stringency of labour market regulation varies across worker categories, with countries like France or Spain tending to implement lower protection standards or special provisions for non-standard forms of employment contract offered to market entrants (Ryan 2001).

Typically, concerns about the impact of labour market regulation on youth transitions have been voiced by economic observers. To the extent that labour market regulation imposes additional labour costs on employers and at the same time prevents equating marginal worker productivity and pay in individual contracts, labour market regulation may reduce the level of labour demand in the long run, in particular for young workers of uncertain work capabilities (Flanagan 1988). Also, restrictions on worker dismissal may contribute to generating an insider–outsider situation in the labour market. Jobs held by ‘senior’ workers are strictly protected, while employers refrain from hiring additional staff because of the high (hiring) standards implicitly required to compensate for the risk of hiring people with inadequate skills (Flanagan 1988; Lindbeck and Snower 1988). Again, such hiring reservations can be expected to pose particular problems with respect to youth transitions, as both market entrants' need for additional training and the higher level of uncertainty inherent in recruiting inexperienced school leavers work to the disadvantage of new entrants. Finally, labour market regulation may have detrimental effects on youth labour market chances as employment protection tends to reduce the dynamics of the labour market and hence affects the job-finding rates among job seekers in general (Bertola and Rogerson 1997; Gregg and Manning 1997a). This again is likely to contribute to employment problems, notably for young people entering the market, who are first-time job seekers by definition.

(p.16) Yet labour market regulation may also be said to involve potentially positive effects on school-to-work transitions. Notably such outcomes may be expected if strong union presence, in conjunction with a centralized system of collective bargaining and cooperative relationships between corporate partners, can be employed in ways that generate economically viable institutional structures of youth labour market integration (Soskice 1994; Ryan 2001). Collective, corporate efforts might include specific wage moderation policies to enhance youth labour market integration both at the level of particular firms or industries and also across the whole economy. Other forms include efforts to establish common training standards for certain occupations or industries or to involve corporate bodies in the formulation and implementation of training curricula (Hannan et al. 1999a). Clearly, corporatist involvement in training systems is most strongly developed in the context of apprenticeship-based dual systems in, for example, Germany or Austria, where employers and unions are actively engaged in both the conceptualization and provision of training. Similar arrangements can also be found in the Dutch vocational training system, which, although primarily school based, still actively involves corporate bodies in the design of training tracks and curricula.

Active labour market policies and youth programmes

Faced with rising youth unemployment in the early 1980s, public policy in many European countries turned to more direct forms of active intervention into youth labour markets. Several countries, notably France and Britain, developed a broad array of programmes designed to assist youth transitions into the labour market through various blends of job search assistance, work experience, remedial education, and vocational training. In Britain, active labour market policies for youth focused on the Youth Training Scheme and its subsequent variants, while France has built up several different kinds of programme and specific youth contracts that serve different goals and various target groups (see Werquin 1999 for an overview). While the different programmes thus clearly aim to increase educational participation, employment, job stability, and wages among the more disadvantaged youth, the empirical evidence as to how far the programmes have actually achieved these goals is still disputed and essentially an open question, although in general terms the scant evidence on European programmes seems to differ favourably from the bleaker evaluation results (Heckman et al. 1999; Ryan 2001). Still, even if youth programmes have had moderate effects on subsequent youth employment experiences, the introduction of fairly large-scale programmes has nevertheless affected the structure of transition processes in many European countries due to institutional lock-in effects (e.g. Ryan 2001). As participation in youth schemes has become more and more institutionalized (p.17) over time, they nowadays constitute an important element of youth transitions in Europe, particularly among the less qualified and disadvantaged youth. Given the importance of youth programmes in some European countries and the wide cross-national variation in the extent, scope, and aims of the programmes enacted, it is unfortunate indeed that, due to restrictions on the available data, we will not be able to present a concise treatment of the role of youth policies for transition processes from the current study.

1.4. The scope of the book

With the focus on these structural and institutional connections, the current volume attempts to provide both a genuinely European and comparative perspective on transitions from school to work. Indeed, the different chapters in this book all focus on transitions from school to work as shaped by the varying structural and institutional conditions existing in the European Union member states. They serve both descriptive and analytic aims. In the first place, the volume contains three chapters providing comparative descriptions of the structure of school-to-work transitions, their preconditions, and outcomes in European Union countries in the 1990s. They aim to sort out the basic facts about youth labour market integration in Europe. A number of chapters systematically address specific elements of institutional and structural conditions and the way they vary between European Union member states. These chapters aim to improve our understanding by providing evidence of how and why these conditions affect transition processes.

First of all, Walter Müller and Maarten Wolbers describe the educational qualifications of young people entering European labour markets as the key individual determinant of successful school-to-work transitions. In this chapter, the authors focus on both cross-national differences in levels and types of education and training and also outline differences between European countries in terms of the scope of educational expansion in recent decades. In this, attention is drawn to the fact that although levels of education have risen tremendously in all European countries, considerable cross-national differences have remained, both with respect to levels of education and, more importantly, with respect to the proportion of young people that have undergone vocational training.

This initial focus on educational qualifications is then complemented in a second chapter by Thomas Couppié and Michèle Mansuy, who describe the nature of labour market outcomes for young people who left the education and training systems during the 1990s. Their chapter focuses on a broad range of transition outcomes and discusses differences between European countries in (p.18) terms of employment and unemployment rates, job stability, and other job characteristics.

These analyses show considerable differences in transition patterns between European countries. Accordingly, Markus Gangl then provides a typological analysis of the transition patterns discussed by Couppié and Mansuy. In particular, this chapter is interested in the extent to which empirical transition patterns cluster into different ideal-type patterns, potentially indicative of the effects of national institutional settings. The basic finding from these analyses is that a considerable proportion of cross-national variation is in fact to be found between particular sets of countries. More specifically, three country clusters will emerge from this analysis: a first group is formed by the traditional dual system countries, Germany, Austria, Denmark, and also including the Netherlands, which share particular features of the transition pattern; the southern European countries constitute a second group of countries; the third group includes the remaining northern European countries also displaying a distinctive transition pattern of its own.

Building on these descriptive analyses, the subsequent chapters then assess some determinants of transition processes in greater detail. In the first of these analytic chapters, Chapter 5, Maarten Wolbers provides a closer look at the issue of dual statuses, that is, the combination of learning activities and work among young people in different European countries. In particular, he locates dual status positions within the structure of both training systems and labour markets and discusses the changing incidence of these status situations over the past decade.

Next, Chapter 6 by Markus Gangl addresses the role of individual qualifications for successful labour market integration. These analyses stress the effects of both the level and the type of education on unemployment and occupational outcomes among those entering the market and assess the potential of national differences in educational systems for explaining differences in transition patterns.

Gangl's efforts are complemented by van der Velden and Wolbers in Chapter 7, which takes a broader view of the impact of institutional conditions on transition outcomes. The authors test for the effects of various institutional indicators, including measures for the structure of training systems, the structure of collective bargaining and wage-setting mechanisms, and the stringency of employment protection. In this direct comparison between competing institutional hypotheses, the structure of training systems again turns out to be the most important predictor of cross-national differences in transition patterns.

Against this background, the subsequent analyses by Cristina Iannelli and Asunción Soro-Bonmatí emphasize the impact of labour market regulation and, more importantly, family structure in a detailed discussion of transition (p.19) patterns in Spain and Italy. These factors figure less prominently in other chapters, yet they turn out to be important in explaining transition patterns notably in southern European countries.

In the final analytic chapter, Markus Gangl turns from institutional analyses to addressing the effects of socio-economic changes on transition patterns in Europe. This particular chapter is interested in the impact of cyclical changes in macroeconomic conditions, changes in youth cohort sizes, continued educational expansion, and structural changes on the labour market chances of those entering the labour market. A major result of these analyses is the evidence adduced for the sensitivity of youth job opportunities to changes in macroeconomic conditions and also—at least among the lowest qualified school leavers—to processes of structural change.

The findings of these different analyses are then summarized and assessed in a concluding chapter by Walter Müller, Markus Gangl, and David Raffe. A major concern of this final assessment will be to weigh the empirical evidence gained in the analyses assembled in the current volume in terms of their contribution to understanding cross-national differences in school-to-work transitions and their changes over time. What emerges as crucial in drawing empirically informed conclusions on these points is the fact that all the analyses in this book are both cross-nationally comparative and draw on the European Union Labour Force Survey as their standard data source.1 In that sense, each of the following chapters intends to give the reader a European view on a particular issue that is basically self-contained. They can be read as single contributions to a specific issue. On the other hand, the common database and methodological standards in all chapters provide a special opportunity for comparative inference, in the sense that the common methodology allows for extensive cross-reading of the results discussed in the various chapters and hence represents a combination of multiple results on different aspects of transition processes in Europe. While we present our own reading of the evidence in the concluding chapter, we naturally invite readers to select the individual chapters according to their own interests. (p.20)


(1) In the methodological appendix to the study we provide a brief description of the characteristics of this database, also of its strengths and weaknesses for the study of the problems pursued in this volume. The appendix also describes the construction of some core variables that have been used in the individual chapters.