The impact of dual VET on the unemployment rate of young adults after the financial crisis: a comparison between Germany and the United States

Abstract

This paper examines whether dual VET enhances labour market resilience for young adults in the aftermath of the 2008 financial crisis. Using harmonised microdata from the German Socio-Economic Panel (SOEP) and the Panel Study of Income Dynamics (PSID) for the United States, linked via the Comparative Panel File (CPF), we compare unemployment among 25- to 34-year-olds whose highest attained qualification is dual VET (Germany) or a high school diploma (United States). Our weighted estimates indicate consistently lower and less volatile unemployment risk for dual VET graduates than for high school graduates, with the gap peaking during the crisis years and persisting thereafter. We interpret these patterns through the lenses of collective skill formation, school-to-work transitions, and the trade-off between specific and general skills. The findings suggest that sustaining and modernising high-quality dual VET can strengthen labour market resilience within a broader skills strategy.