Party Ideology and Vocational Education Spending: Empirical Evidence from Germany

Abstract

We provide-to the best of our knowledge-the first empirical study on the political economy of public spending on vocational education. Vocational schools raise human capital among non-Academics and give the latter a stronger bargaining position in wage negotiation-thereby supporting the clientele of leftwing parties. At the same time, they provide publicly funded inputs that raise firm productivity-an aim particularly important for conservative parties. We analyze expenditures on vocational schools of 301 West-German counties between 2002 and 2013 using two-way fixed effects and mixed models. We find the counties' expenditures on vocational schools to decrease in the political power of Social Democrats and increase in the political power of Christian conservatives in the county council. Expenditures are higher in election years. We find no support for the conjecture building on Jensen (2011, Compar. Polit. Stud. 44, 412-435) according to which expenditures on vocational education are higher in regions suffering from deindustrialization. (JEL codes: H75, D72).