The Interplay between Education, Skills, and Job Quality

Compared to general education, vocational education and training (VET) has been shown to facilitate young people’s integration into the labour market. At the same time, research suggests that VET falls short in teaching basic skills and, in turn, may lead to less adaptability to labour market changes and long-term disadvantages in individual labour market outcomes. To better understand the relationships between education, skills, and labour market outcomes, we examine to what extent job quality differs between individuals with general education and those with VET with respect to different skill levels. Furthermore, we investigate whether the relationship between type of qualification and job quality differs by skills. We broaden past research by considering four indicators of job quality: earnings, job security, job autonomy, and the match between respondents’ abilities and job demands. Using data from the Programme for the International Assessment of Adult Competencies for Germany, we demonstrate that individuals with academic education and advanced VET score higher in job quality concerning earnings and job autonomy as compared to individuals with initial VET. Comparing the two higher qualified groups, academic education is more associated with higher earnings than advanced VET, while the level of job autonomy is similar. Regarding the abilities-demands match, both groups score lower than individuals with initial VET. Moreover, higher literacy skills are associated with higher levels of job quality irrespective of the type and level of formal qualification. Finally, we find no empirical evidence that skills compensate for or reinforce disadvantages in job quality derived from professional qualifications.