Low-Skilled Workers Underestimate Upskilling Benefits, Limiting Vocational Training Participation
Economy / Finance

Low-Skilled Workers Underestimate Upskilling Benefits, Limiting Vocational Training Participation

A new study conducted by the Ifo Institute and the Technical University of Munich (TUM), surveying 3,700 employees, reveals a significant disparity in the participation of workers in corporate training programs across Germany. Only 45 percent of lower-skilled workers take part in these training initiatives, compared to a much higher rate of 67 percent among higher-skilled employees.

Philipp Lergetporer, an Ifo research professor and professor of Economics at TUM Campus Heilbronn, suggests that this difference is largely due to how participants view the benefits. He explained that highly qualified individuals generally expect substantial professional and career advantages from further training, whereas lower-skilled employees tend to underestimate the potential returns.

The research explored the various benefits that employees anticipate gaining from training. According to co-author Hanna Brosch, an economist at TUM Campus Heilbronn, participants expected both higher earnings after undergoing training and non-monetary advantages, such as better opportunities for advancement, more engaging job duties, and a lower risk of losing their jobs. On average, employees expected to receive nearly nine percent more salary six years after beginning regular advanced education compared to if they had not participated.

Using data from the online survey, the researchers were able to identify measures that could increase the willingness to participate in further training. Franziska Pfaehler from the Ifo Center for Educational Economics pointed out that clarifying the economic returns of training boosts the intent to participate, particularly among lower-skilled workers. Therefore, she recommends that employers implement short, cost-effective communication and informational activities to encourage greater uptake of corporate education.