Reducing the Share of the Unskilled to Avoid Skill Shortages in Germany

The unemployment of the unskilled workers in the German labor force has been rising at an above average rate since the end of the 1970’s. The education and training system has to keep space with the changing skill structure in the economy. Therefore, the best strategy is to reduce the supply of the unskilled by (1) reducing the share of drop-outs from school; (2) increasing the participation in vocational training, especially for young people with a migration background; and (3) providing the younger unskilled in the labor market with a second chance qualification via appropriate initial or continuing training.