School-to-Work Transitions in Germany and the Impact on Subjective Wellbeing

The school-to-work transition is a decisive period during an individual’s life course as the life-course related decisions regarding vocational and academic educations and entry ports to the labor market made during this period typically affect individual life course in a long-lasting and multifold way. That is especially the case in a country with early and severe school tracking and strongly assorting functions of educational degrees, as observed for the case of Germany. And as explored intensively in the literature, adverse starting points after education and training are likely to lead to adverse outcomes that might cumulate over the life course. This study analyses subjective well-being over individuals early labor-market career addressing especially two aspects. How is individuals labor market stage at age 18 associated with subjective well-being? And how does subjective well-being develop till the age of 30? As the school-to-work transitions in Germany are severely structured by the tracked system of education and training the paper especially investigates the function of school tracks on starting point and development of subjective well-being. The paper employs the most current version of the German Socio-Economic Panel (currently GSOEP V38.1). Based on rich longitudinal data, ols and fixed effects regressions models results reveal both a track specific level of initial wellbeing and well-being-shaping effects of the individual’s initial allocation on the labor market for the development of subjective well-being over the life-course, whilst transitions to NEET activities result into the reversed effect of subjective well-being. Based on fixed effects impact function estimates related to the development of subjective well-being indicate that subjective well-being responds in a gender-specific but also in an east-west specific manner to adverse starting points. Overall, the results reveal great intra-individual variation in subjective well-being during the school-to-work transition period in Germany.