Abstract: The unemployment among young people in Germany is one of the lowest in Europe. Notably, the relation between the unemployment rate among young people and the standard unemployment rate is rather low compared to other EU member states. How can this phenomenon be explained? We show, that the German vocational education system ensures labour market entry for many graduates, but also, that vocational preparation courses are extensively used by low skilled young people. If we reassess youth unemployment by the number of participants in such courses we obtain a “shadow unemployment rate for young people” which is in line with official international data. Therefore, minimum labour market qualification standards are often not met by young people. To ensure labour market entry for these persons, we suggest that apprenticeship pay should allowed to be differentiated by qualification. Furthermore, vocational preparation courses should be constructed in a way which leads the young people directly into vocational training with certified degrees.