Germany’s Dual Education System to Help Iran Tackle Youth Unemployment

EghtesadOnline: Less than a year into its partnership with Iran Chamber of Commerce, Industries, Mines and Agriculture and the Technical and Vocational Training Organization, Germany’s Stiftung Bildung and Handwerk (SBH, or Education and Craft Foundation) seems to have made considerable headway in conducting its trademark project in Iran.

News ID: ۷۴۶۶۰۱

02 February 2019

On March 3, 2018, as one of the largest and most efficient educational networks in Germany, SBH signed a memorandum of understanding with ICCIMA and TVTO (state-run organization in charge of technical and vocational training affiliated to the Ministry of Cooperatives, Labor and Social Welfare) to introduce the "Dual Vocational Education and Training Program" in Iran over three years.

"Dual VET would help bridge the skills gap in the economy, given the fact that lack of qualified, skilled workers is one of the main challenges facing Iran’s private sector today," Abazar Barari, a representative of ICCIMA, told a press briefing on the project's progress on Monday.

“As one of the unresolved issues troubling Iran’s economy, unemployment is believed to be caused by structural factors, including the nature of educational system. Iranian workforce is largely trained for working in public sector companies. The fact that each industrial or manufacturing enterprise has training centers of its own attests to the fact that the current system of education is failing to address the manpower needs of industries,” Financial Tribune quoted him as saying.

According to a report by the Donor Committee for Dual Vocational Education and Training, this technical and vocational training system can simply be defined as apprenticeship with practice learning in the company and theory at school. It combines practical training at the workplace with classroom-based training in schools or training centers. The two venues (business and classroom) can be enhanced with a third simulated environment (e.g. lab, workshop, etc.).

Dual VET is a joint endeavor of public and private partners, as well as schools and businesses. Labor organizations world of work are essential for dual VET. Preparing school graduates for the world of work is normally at the heart of VET systems. Therefore, VET is at the confluence of the educational and professional worlds.

In dual VET, trainees are employees with a special status. They are recruited by the businesses themselves.

"In countries with a dual system such as Germany, initial VET typically lasts from two to four years and the ratio of business-based training to classroom education is 70:30," said Alireza Moqayedi, the director of SBH project in Iran.

“This vocational education and training system has resulted in a very low youth unemployment rate of around 7% for the population of those younger than 25 in Germany compared with other European countries.”

Iran Unemployment Snapshot

The Statistical Center of Iran provides two figures for the youth unemployment rate in Iran: the proportion of the population between the ages of 15 and 24 and those between 15 and 29 years.

SCI's latest report shows the youth unemployment rate for those between 15 and 24 years, stood at 27% in the third quarter of the Iranian year 1397 (Sept. 23-Oct. 22, 2018), posting a 1.3% decline while the unemployment rate of those between 15 and 29 years, stood at 24.5%, posting a 0.5% decline compared with the same period of last year.

Overall, Iran’s unemployment rate, the proportion of jobless population of those who are 10 years and above, stood at 11.7% in autumn, indicating no change compared with the same period of last year.

A total of 3,174,042 Iranians were unemployed in the third quarter.

Men's unemployment rate stood at 10.1% while women's joblessness hovered around 18%, as over 2.19 million men and 980,578 million women of ages 10 and above were jobless in the third quarter.

The unemployment rate was at 13.2% for urban areas (2.64 million people) and 7.6% for rural areas (528,994 people).

The unemployment rate in autumn was lower compared to the rate of 12.2% in summer.

SCI put Q3 labor force participation rate—the proportion of the population of ages 10 years and above that is economically active, i.e. either employed or looking for work—at 40.5% or 27.09 million people, registering a 0.6% rise year-on-year.

Men’s and women’s economic participation rates were 64.4% and 16.4% respectively in Q3. SCI reports that 21.63 million of men and 5.46 million of women of ages 10 and above were economically active in the third quarter of the current year, that is they were either employed or looking for job.

The share of higher education unemployment from the total rate of unemployment was measured to be 40.5% in Q3, which indicates an increase of 3.4% compared with the same quarter of last year. The unemployment rates of male and female graduates stood at 28.1% and 68.2% respectively while higher education unemployment rates were 43.6% in urban areas and 25.3% in rural areas during the period.

Total employment rate of Q3 was 35.7% (23.92 million). Employment rates for men and women were 57.9% and 13.4% respectively, as 19.44 million men and 4.48 million women were employed in fall. The employment rate was 34.5% or 17.46 million in urban areas and 39.4% or 6.46 million in rural areas.

The employment rate of university graduates stood at 23.9% of the total employed population, with male and female graduate employment at 20.6% and 38.5%, and graduate employment rates in urban and rural areas at 30.2% and 7% of the total population of job-holders respectively.

The services sector employed 49.9% of the Iranian employed population (11.93 million), 0.1% less than in the same quarter of last year, whereas industrial and agricultural sectors provided 32.9% and 17.2% of the employed population with jobs respectively.

Over 7.87 million were employed in the industrial sector, indicating no change over the same period of last year and 4.1 million worked in agriculture, posting 0.1% growth year-on-year.

The services sector employed 9.63 million men and 2.3 million women in fall; over 6.52 million men and 1.35 million women were working in the industrial sector and 3.27 million of men and 827,741 women worked in the agriculture sector in Q3.

Services sector accounted for 59.5% or 10.38 million of all jobs in urban areas and 23.9% or 1.54 million of jobs in rural areas. Industrial sector made up 34.4% or six million of the jobs in urban areas and 29.1% or 1.87 million of employment in rural areas whereas 6.1% or 1.07 million of the total jobs in urban areas and 47% or 3.03 million of the jobs in rural areas were in agriculture sector.

Three Phases

Moqayedi noted that dual VET is a joint effort of public and private sectors so it requires a dialogue and institutional collaboration between the two. SBH aims to forge this link between industrial enterprises and TVTO.

“The project is divided into three phases. In 2018, the first year of its existence, initial needs assessment and baseline studies were conducted in a number of cities, including Yazd, Hamedan, Arak and Urmia,” he said.

The purpose of a baseline study is to provide an information base against which to monitor and assess an activity’s progress and effectiveness during its implementation and after the activity is completed.

“Here the data on the needs of about 100 companies that are members of ICCIMA have been collated. The project has been introduced to provincial commerce chambers and enterprises affiliated to them by the 'steering committee' on a weekly basis. These meetings would also help foster collaboration among SBH, ICCIMA and TVTO to identify the real needs of economic enterprises,” Moqayedi said.

The second phase of the project, which includes offering counseling and implementation of the dual VET in select provinces, will start in 2019 and finally, during the third phase, the project will be evaluated and follow-up measures will be taken, he concluded.

Dual VET Prospects

According to TVTO representatives in the project, Reza Tarkhan and Mohammad Alishahi, one of the shortfalls in Iran’s education system and its technical and vocational training is that the whole system is supply-oriented instead of demand-oriented.

This joint project aims to engender systemic change, bringing together the demand and supply sides of the labor market to significantly increase employment opportunities for high potential youth.

The Donor Committee for the Dual Vocational Education and Training report says dual VET is closely intertwined with the professional concept, which in turn includes a socio-political dimension. Professions are not just embodiments of certain skills, but traditionally hold a specific status in society.

Furthermore, dual VET is automatically associated with the concepts of quality and skilled work, and it views the “Meister” (Master Craftsman) as a respected title.

Beyond VET systems, most partner countries are familiar with a system of labor market measures. Using a bundle of instruments, these systems serve to integrate the unemployed and difficult-to-place job seekers into the world of work. Advancement of professional qualifications is typically one of these.

Dual VET is a viable option for dynamic economic sectors with high demand for a qualified workforce, which in the local context is often hard to find. Thus, dual VET tends to be more successful in transition economies and middle-income countries.

In the long run, dual VET requires an organized private sector with sector-specific associations and interest groups.

Dual VET might also be an option in fragile contexts and economies with a large informal sector. It is an especially promising option if it integrates traditional apprentice systems by reorganizing them with dual approaches.

To establish a dual VET system takes time. Therefore, given the typical development project and timeframes, one should, at least during the first project year, not expect any major contributions to labor market insertion, particularly regarding specific target groups, the report read.