In this well-written book, Marius Busemeyer reveals understudied and undertheorized linkages among educational institutions, labor market risks, and inequality. He seeks to understand how partisan politics has shaped different education and training regimes in Western Europe, how educational institutions have impacted the life chances and labor market risks of individuals, and how educational institutions affect citizens’ preferences over spending on education. The book innovates at the theoretical level by identifying distinct worlds of skill formation (liberal, collective, statist, mixed), and by arguing that educational policy should be viewed as an integral element of welfare state research. Busemeyer integrates and expands upon insights from two broad literatures—educational sociology and comparative political economy—that have long ignored each other.

Busemeyer begins by sketching out the historical development of education and training policies in Britain, Sweden, and Germany. Partisan conflicts constitute path-forming events that have shaped upper and postsecondary education. Once a particular course of action is chosen, the institutional density of policy fields increases and locks in a certain skill-formation regime. Building on the varieties of capitalism literature, Busemeyer argues that a cross-class compromise between political parties and economic actors shapes the institutional equilibrium that is eventually chosen. But in contrast to existing studies published by Isabel Mares, Peter Swenson, and C. J. Martin and D. Swank, the author argues that the nature of the cooperation depends on the political actor who engineered the alliance during a critical juncture. Depending on the dominant actor, policymakers will selectively grant privileged access to organized interests.

Busemeyer’s focus on the formateur of political alliances allows him to explain diversity within the Conservative and Social Democratic Party families. In Britain, Conservatives regarded training boards as infringing on the autonomy of individual firms, and thus they deliberately used the reforms of the wage bargaining and training system in the 1980s to weaken labor unions. In Sweden, the hegemony of Social Democracy and the strength of trade unions was an important reason for the dismantling of firm-based apprenticeship training because unions worried that apprentices might be misused as a cheap source of labor. In Germany, it was the Christian Democratic Union that engineered the cross-class coalition, not the Social Democrats. As a result, business interests had a privileged position compared to unions. Here, Busemeyer resists the temptation to cherry-pick evidence in order to fit his argument. The case studies are rigorously researched and help to illuminate the logic of the theory.

Chapter 3 expands the analytic focus to a broader set of countries of the Organization for Economic Co-operation and Development (OECD). Busemeyer elaborates on the four worlds of skill formation. Employing regressions in cross-sectional time-series analysis, he finds that government partisanship is an important determinant of education and training systems. Social Democrats tend to boost public spending on education and increase tertiary enrollment rates. Conservative parties are more likely to increase the private share of education financing and decrease the amount of apprenticeship training. Christian Democrats, in turn, are more likely to expand apprenticeship training and to lower enrollment in tertiary education. Economic coordination matters most in determining the relative importance of VET (vocational education and training) as an alternative educational pathway to academic higher education. While the boundaries between skill regimes are clearly articulated, the mixed category is theoretically underdeveloped and less important for the overall argument.

Chapter 4 is the heart of a very good book. Here, Busemeyer cogently explicates the linkages among educational institutions, labor market risk, and socioeconomic inequalities. He moves beyond simplistic accounts that connect the mere presence or absence of VET systems to a certain level of income inequality. His regression and time-series analyses confirm his hypothesis that there are more fine-grained trade-offs within the skill regimes. He finds that statist skill regimes like France with an emphasis on school-based VET are associated with lower levels of wage inequality than collective skill regimes, but suffer from higher levels of youth unemployment (due the marginalization of employers in VET provision). Collective skill regimes like Germany are characterized by high levels of educational stratification, but active employer involvement in VET ensures low levels of youth unemployment. In liberal skill-formation regimes like Britain, the lack of viable VET options and expansion of access to higher education produced educational stratification (due to a process of differentiation within the higher-education sector) and high levels of socioeconomic inequality.

Chapter 5 aims to show that educational institutions influence popular attitudes toward welfare spending and that socioeconomic inequality affects popular attitudes toward the education system. Using Eurobarometer data from 2004 and employing multilevel regression analysis, Busemeyer uncovers interesting feedback effects: in countries with well-developed VET systems, people are more likely to recommend VET as a viable alternative to academic education. By contrast, where private spending on education is high, people are less likely to recommend academic education. In countries with stratified educational systems (where access to education is blocked by institutional hurdles), the value of education seems to increase and citizens are more likely to recommend academic over vocational education. This chapter is undertheorized, as it remains unclear when policymakers will care about public opinion more than ideological purity, and which type of feedback effect one might expect to emerge in a given regime.

The book’s strength is the tight integration of theory, case studies, and quantitative analysis. The author synthesizes a vast literature in a coherent way, the case studies are carefully done, and the generalizability of his regime typology becomes evident through data from a broad selection of OECD countries. The different model specifications of the regression and time-series analyses are well done, with the appropriate robustness checks. The author is up front about data limitations that have caused sample sizes to vary, and acknowledges that some of the findings should be interpreted with caution. Busemeyer neither creates straw men nor caricatures existing works; he builds upon previous theoretical accounts in a pragmatic way that allows him to study the empirical questions. The book avoids common pitfalls of typology research, such as functionalism or determinism, by developing testable hypotheses about partisan politics, institutional outcomes, and citizen preferences regarding the welfare state.

Since every reader will have quibbles, however, I will share two of mine. First, at the empirical level there is no clear separation between different VET regimes. The distinction between school-based and workplace-based VET is crucial for the theoretical argument about the impact of educational institutions on inequality, but data limitations prevent Busemeyer from differentiating between the two in the empirical analysis. Instead, he uses the share of students in VET programs versus general academic programs. While he makes the best of the limited data availability, this blunt measure contrasts with the more precise theoretical discussion, where he convincingly argues that the type of VET matters for levels of socioeconomic inequality and youth unemployment.

Second, the German institutions are portrayed as too static to provide a realistic account of their ongoing restructuring. Due to structural changes in the past 20 years, Germany (which is a critical case, according to Busemeyer) no longer falls fully within the collective skill regime, but has begun to resemble the liberal type. The number of firms that offer training positions has decreased markedly in the past two decades. Access to higher education has been continuously expanded, resulting in a surge of students entering universities. In the past years, the number of university entrants has surpassed the number of VET candidates. In addition, workplace-based training has lost some of its equalizing function since the supply of VET positions has declined noticeably in the past 20 years. In 2012, only 21.3% of firms offered training positions, and the importance of workplace-based training for overall employment has decreased (Bildungsberichterstattung Bildung in Deutschland, 2014, p. 99). Another trend that does not fit with the trade-offs observed in collective skill regimes is the growing pool of unsuccessful apprentices—those unable to secure firm-based training. These people are frequently stuck in transition arrangements (berufsvorbereitende Massnahmen) that are mostly detours or dead ends, with bleak prospects to secure a traditional, permanent nine-to-five job. Transitional measures keep youth unemployment figures artificially low because people in such positions (who frequently have diverse ethnic backgrounds or come from disadvantaged families) do not count as unemployed.

This means that the book overstates the equalizing effect of workplace-based VET, as well as the extent to which VET in collective skill regimes constitutes a truly attractive alternative to higher education. Thus, a productive follow-up study would be an analysis of the kind of skills that apprentices learn in school-based versus workplace-based VETs. Quality of skills might be measured by the type of competencies that apprentices acquire, whether or not the training was completed, and the kind of employment that apprentices secure post-training. Such a study might alter our assessment of the trade-offs that exist in collective skill regimes, with potentially important consequences for levels of inequality and youth unemployment.

These nit-pickings take little away from the quality and breadth of Skills and Inequality, however. The identification of distinct worlds of skill regimes measures up to examples set by titans in the field, such as Gøsta Esping-Andersen, Peter Hall and David Soskice, and Torben Iversen. The book will likely become required reading in undergraduate and graduate courses in comparative political economy and social policies; it will certainly be on my syllabus for years to come.