How being more like Germany could make the world $1.1 trillion better off

'We have nothing to lose but everything to gain from sharing our experiences over what works and what doesn’t'

The skyline of Frankfurt, Germany's financial capital (Getty)

The world’s most advanced economies could be better off to the tune of hundreds of billions of dollars a year if they learned by Germany’s example when dealing with young workers, a new study has claimed.

The Young Workers Index 2016 said that if every other OECD country reduced its level of youth unemployment to that of Germany, the world would be around $1.1 trillion richer.

Produced by PricewaterhouseCoopers and based on eight different key measures, the index actually named Switzerland as the best country in the world to be a young worker.

But in terms of “NEET” levels - the number of young people not in education, employment or training - Germany was among the best in the world.

Just 10.1 per cent of those aged between 20 and 24 were in this NEET category for Germany. That compares to 17 per cent in the UK, and 17.5 per cent in the US.

Switzerland and Germany have succeeded in producing what the report terms a “dual education system”, where students are placed into vocational or academic streams depending on their skills, without particular social status bestowed on one option or the other.

These countries have also been successful at encouraging employers to get involved in the education system. Around a third of companies in Switzerland engage in apprenticeship training programmes, and Germany’s Vocational Training Act has provided the framework for 500,000 company-based training contracts a year.

PWC’s analysis modelled how each of the 35 OECD countries would improve its economy if its NEET level dropped to that of Germany.

Based on 2015 estimates, it said the UK would increase its GDP by 2.3 per cent - more than what it currently spends on the defence budget - or some $65 billion a year.

The US, with its much larger economy, would stand to gain more than $460 billion if it could bring down youth unemployment.

And Italy, which ranked last in the index with 35 per cent of 20 to 24-year-olds unemployed, would boost its GDP by a staggering 8.4 per cent if it could somehow match Germany.

The PWC project to create this year’s index was led, somewhat appropriately, by 23-year-old David Tran, who graduated from University College London in 2014.

“We have nothing to lose but everything to gain from sharing our experiences over what works and what doesn’t,” he said.