Advanced education and training pays off

A degree is not essential if you want a career. These are the findings of a recent study by the Cologne Institute for Economic research (IW). Master craftsmen and women or technicians can earn just as much as academics - however this depends on certain factors.

Companies assess the competencies of advanced education and training graduates (FBA), that is of master craftsmen and women, technicians, business administrators and business economists. And this is also reflected in the income, as shown by an evaluation of the Employee Survey of the Federal Institute for Vocational Education and Training (BIBB) and the Federal Institute for Occupational Safety and Health (BAuA) as well as a company survey by the Cologne Institute for Economic research as part of the IW personnel panel.

28 per cent of master craftsmen and women, and of technicians, are paid a higher hourly rate than the average university graduate. On average, approximately one quarter of university graduates earn less than the average FBA.

"Field, occupation, work requirement and sector are more relevant for remuneration than qualification," explains Regina Falke, researcher at the Cologne Institute for Economic research. The majority of advanced education and training graduates are remunerated to the same level as Bachelor's graduates; by comparison, Diploma and Master's graduates often earn more.

Differences in remuneration are relatively minimal mainly among commercial advanced education and training graduates and university economics graduates. However, a large pay gap is evident between industrial and technical advanced education and training graduates and university graduates with a scientific (engineering) degree. Here the differences in the activity profiles are more pronounced than in office-based occupations - for example in the area of research or business management.

Both qualification pathways therefore offer good career opportunities because, explains Falke, "Our analysis suggests that companies need and value both groups and that the different qualifications are complementary." For businesses it is therefore not a case of 'either' academics 'or' advanced education and training graduates, but rather 'both'.