Degrees from vocational education and training (VET) are considered to guarantee a successful transition from school to work. The German labor market is strongly segmented along occupations. Consequently chances for a successful transition into the labor market are distributed unequally. Educational certificates from general education as well as from the VET system serve as signals for expected productivity and learnability throughout work and occupation. Hence, signals determine wage expectancies of VET graduates. Better degrees in general and vocational education, as well as higher training expenditures by bigger firms eventually result in first job salary disparities. Using the Saarland VET Graduate Panel, we can for the first time analyze the impact of final grades received by VET graduates on wages in their first job. In our study VET grades represent a stable and significant additional human capital indicator in explaining wage differences among graduates within comparable occupations. © 2010 Duncker und Humblot GmbH. All rights reserved.
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