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EACEA National Policies Platform


3. Employment & Entrepreneurship

3.1 General context

Last update: 18 March 2021
On this page
  1. Labour market situation in the country
  2. Main concepts

Labour market situation in the country

The German labour market
  • German labour law offers strong protection against dismissal.
  • Collective bargaining parties [on the employer side, representatives of the employer or an association of employers; on the employee side, the unions] play a central role in deciding wages, working hours and other working conditions.
  • Germany has a well-established dual system of vocational education and training.
  • In the case of unemployment, employees are paid unemployment benefit (Arbeitslosengeld) or basic security benefits (Grundsicherung).

The labour market reforms between 2003 and 2005 have created a more flexible labour market. The 2008/2009 economic crisis in Europe did not lead to wide-scale job cuts in Germany. Youth unemployment fell between 2005 and 2019 from 12.5 to 4.5%. This is partly a result of implementing a dual vocational education and training system (duales System) and a wide range of programmes for the transition from school to work. A large number of unemployed young people have not completed vocational training, which poses a big challenge. In 2017, almost two thirds (62.4%) of unemployed people under the age of 25 had not completed vocational training. Among unemployed people over 25, it was less than half (48.8%).

Labour market statistics (July 2020):

  • Employees subject to social security contributions (July 2020): 33, 330, 000
  • Unemployed persons: 2, 910, 008 (rate:6.3 %; -1.2 % down on prior year)
  • Unemployed persons in 15-25 age group:
    • 15 to under 20: 52.756
    • 20 to under 25: 242,745

Underemployed persons (excluding short-time work) in July 2020: 3,661,000 (rate: 6.9, prior year: 1.0 %)

The Federal Employment Agency (Bundesagentur für Arbeit, BA) provides statistics

Trends in temporary employment on the German labour market:

  • The share of temporary workers in the total workforce has declined to 2.3% in 2020.
  • The majority of temporary workers are men (71%) and 49% are under 35. The share of foreign temporary workers is higher.
  • The temporary employment industry is in extreme flux. The risk of dismissal has increased.
  • Temporary work is one way for (young) individuals to access the labour market. 36.9% are offered permanent employment.
  • 72% of unemployed individuals who became temporary workers after unemployment remain in jobs subject to social security contributions six and twelve months later.
  • Demand for workers in the temporary labour market remains high.
Challenges in the area of vocational training:
  • Abitur university entrance qualifications and university degrees are competing with vocational training.
  • The number of apprentices is declining due to demographic change.
  • The number of new apprentices with a university entrance qualification has risen.
  • Demand for apprenticeships is on the rise.
  • Improved coordination between supply of and demand for apprenticeship places.
  • Finding people to fill open training places (number of unfilled places is rising), also in (very) small firms.
  • Treatment of young adults who have not successfully completed vocational training.
  • Handling of regional and industry-specific differences on the market for training places.
  • Digitalisation.
  • Integration of young refugees into vocational training and employment.
National reports

In Germany, programmes and initiatives relating to vocational training and the labour market are monitored and evaluated systematically. The results of this monitoring exercise are published, inter alia, in the vocational education and training report (Berufsbildungsbericht), in the data report (Datenreport) as a supplement to the vocational education and training report and in the education report (Bildungsbericht).

  • Vocational education and training report (Berufsbildungsbericht)

The Federal Ministry of Education and Research (Bundesministerium für Bildung und Forschung, BMBF) submits an annual vocational education and training report (Berufsbildungsbericht); the most recent report is from 2020. It describes the situation on the vocational training market in 2019 and the priorities, activities and programmes of the Federal Government in the field of vocational education and training.

  • Data report (Datenreport)

The vocational education and training report is supplemented by the annual data report (Datenreport) of the Federal Institute for Vocational Education and Training (Bundesinstitut für Berufsbildung, BIBB); the most recent report is from 2020. The data report is the main source of information and data for the vocational training report. It illustrates developments in vocational training. The theme of the report in 2020 is the dual system of vocational education and training (Die Duale Berufsbildung).

  • Education report (Bildungsbericht)

Since 2006, BMBF has also published its biannual report on education (Bildungsbericht); the most recent report is from 2020. It uses indicators to back up the thorough information it provides on the education system in Germany. It ranges from early childhood education, general education, vocational training, higher education through to continuing vocational training in adulthood. The education report documents the state of play of and progress made in the educational system and flags up current challenges. The theme of the report in 2020 is education in a digitalised world (Bildung in einer digitalisierten Welt).

The federal government published its last Progress Report on the Skilled Labour Concept  (Fortschrittsbericht zum Fachkräftekonzept) in 2017. It also reviews developments in the labour market situation of young people and young adults using indicators and targets. There is currently no across-the-board scarcity of skilled labour. There are bottlenecks in certain professions including the technical professions, healthcare and nursing. Further information is available in the Federal Employment Agency’s (BA) analysis of skilled labour bottlenecks.

BA publishes annual reports on the effects of employment and training measures. It also provides a continuous analysis of the labour and training places market for under-25s as of July 2019 (Analyse des Arbeits- und Ausbildungsstellenmarktes für unter 25-Jährige Juli 019).

Since 2005, the youth chapter of the German trade union confederation (Jugend des Deutschen Gewerkschaftsbunds, DGB-Jugend) has published an Ausbildungsreport (training report), thus backing the debate surrounding the quality of vocational training. The most recent report is from 2019 .

The Institute for Employment Research (Institut für Arbeitsmarkt- und Berufsforschung, IAB) of the Federal Employment Agency monitors the labour market on the basis of legal mandates: for the area of unemployment insurance this is in accordance with Book 3 of the Social Code (Sozialgesetzbuch Drittes Buch, SGB III), and for the basic security benefits system for claimants of working age in accordance with Book 2 of the Social Code (Sozialgesetzbuch Zweites Buch, SGB II). IAB regularly publishes short reports and analyses.

The findings of the reports mentioned above support policy consultations, represent input for policy development and help to shape the public debate on education and labour market policy and the implementation and adaptation of employment support schemes.

Links to further information

Main concepts

In Germany, being in employment is seen to be very important. It has various functions: It provides a secure livelihood and integrates individuals into society. It helps the econ-omy to grow and prosper and supports the social sector.

Definitions in connection with youth employment

Vocational training in the dual system (Duale Berufsausbildung) combines theoretical training in a vocational school (Berufsschule) with learning in the workplace.

Minimum wage (Mindestlohn) is the minimum amount to be paid by the employer as stipulated in a collective wage agreement (Tarifvertrag). It was introduced throughout Germany in 2015 through the Act Regulating a General Minimum Wage (Mindestlohngesetz).

Statistics on employees also include young people aged 15 or above. When categorising employed persons according to economic sectors, occupational status, civil status or nationality, the following age groups are used: 15 to 20, 20 to 25 and 25 to 35.

"Unemployed persons" (Arbeitslose) are individuals who are temporarily out of work, are looking for employment subject to social security contributions (sozialversicherungspflichtige Beschäftigung) and in this context, are in receipt of assistance from the Employment Agency (Agentur für Arbeit) and have registered with the Agency as unemployed.