The political economy of employability: Institutional change in British and German higher education

The article explains the different development of the employability and skills agenda in the British and German higher education systems from the late 1990s and throughout the 2000s. It shows that in the UK universities across the entire sector embraced the employability and skills agenda, while research universities in Germany firmly opposed it and argued that the employability and skills agenda should be exclusive concern of universities of applied sciences. Drawing on concepts from the higher education and comparative political economy literatures, such as differentiation and coordination, the article develops the argument that these distinct trajectories can be explained by the different incentive-sets faced by universities in their respective institutional settings. By highlighting the different behaviour that universities adopt depending on the higher education system within which they are embedded, the article advances broader theoretical points that are relevant for the higher education literature as well as the literature on the political economy of skill formation.