-
Altonji, Joseph, Erica Blom and Costas Meghir (2012).
Heterogeneity in Human Capital Investments: High School Curriculum, College Major, and Careers.
In: Annual Review of Economics
4(1)
, 185-223
.
Abstract.
Link.
Motivated by the large differences in labor market outcomes across college majors, we survey the literature on the demand for and return to high school and postsecondary education by field of study. We combine elements from several papers to provide a dynamic model of education and occupation choice that stresses the roles of the specificity of human capital and uncertainty about preferences, ability, education outcomes, and labor market returns. The model implies an important distinction between the ex ante and ex post returns to education decisions. We also discuss some of the econometric difficulties in estimating the causal effects of field of study on wages in the context of a sequential choice model with learning. Finally, we review the empirical literature on the choice of curriculum and the effects of high school courses and college major on labor market outcomes. [close]
-
Argys, Laura, Daniel Rees and Dominic Brewer (1996).
Detracking America's Schools: Equity at Zero Cost?.
In: Journal of Policy Analysis and Managment
15(4)
, 623-645
.
Abstract.
Link.
Schools across the country are ending the practice of grouping students based on ability, in part because of research indicating that tracking hurts low-ability students without helping students of other ability levels. Using a nationally representative survey conducted by the National Center for Education Statistics (NCES), the authors reexamine the impact of tracking on high school student achievement through the estimation of a standard education production function. This approach allows them to control for the possibility that track is correlated with factors such as class size and teacher education. In addition, the authors address the possibility that there are unobserved student or school characteristics that affect both achievement and track placement. The authors' results indicate that abolishing tracking in America's schools would have a large positive impact on achievement for students currently in the lower tracks, but that this increase in achievement would come at the expense of students in upper-track classes. [close]
-
Asplund, Rita (2001).
Education and Earnings: Further Evidence from Europe.
Helsinki:
ETLA, Elinkeinoelämän Tutkimuslaitos. The Research Institute of the Finnish Economy
.
Abstract.
Link.
This book offers further European evidence on the economic role of education at the individual level. A first topic concerns the potential impact of the differing risk of unemployment across differently educated people on the estimated return to education. Accounting for these differences along with the effects of the unemployment benefit system does influence the average return to education but the impact varies substantially across countries. A second topic focuses on what the return to education actually measures. Do investments in education really improve the productivity of individuals or are they merely devices used for signaling to employers about innate abilities? The evidence in support of the productivity-augmenting effect remains considerably stronger than the evidence in support of the signaling role. A third topic addresses the occurrence of general and firm- specific training and its relation to job mobility. Firms turn out to invest in both types of training, and there is no clear-cut evidence that those having received general training show a higher tendency of leaving the firm. A fourth and final topic explores the enrolment into higher education and the impact of public funding and current returns to education on these decisions. This supply-side aspect is further linked mainly to the demand for educated labour, but also to the institutional labour market framework, in an attempt to explain the observed variation in average returns to education across European countries. Public funding and admission rules are found to be important determinants of the supply of educated labour. The impact of the current rate of return to education is negligible. In itself, however, the return to education is highly dependent on the balance between supply and demand, much less so on the institutional labour market setting. [close]
-
Bauer, Philipp and Regina Riphahn (2006).
Timing of School Tracking as a Determinant of Intergenerational Transition.
In: Economics Letters
91(1)
, 90-97
.
Abstract.
Link.
We test with Swiss data whether intergenerational educational mobility is affected by the time at which pupils are first streamed in secondary school. Late tracking significantly affects mobility and reduces the relative advantage of children of better educated parents. [close]
-
Bertocchi, Graziella and Michael Spagat (2004).
The Evolution of Modern Educational Systems: Technical Versus General Education.
In: Journal of Development Economics
73(2)
, 559-582
.
Abstract.
Link.
We study the evolution of an educational system founded on a hierarchical differentiation between vocational and general education, with vocational playing an inferior role in the society. The dynamics are best summarized by the ratio of the fraction of the population in vocational to that in general education, which we interpret as a measure of the degree of stratification of the society. We show that this ratio first rises and then declines with the level of development, displaying an inverted U-shape which reflects the complex interaction between economic and political forces, including aggregate income growth, wealth inequality and political participation. [close]
-
Betts, Julian R. (2011).
The Economics of Tracking in Education.
In: Eric A. Hanushek, Stephen Machin and Ludger Woessmann (eds.).
Handbook of the Economics of Education, Vol. 3.
Amsterdam:
North-Holland
, 341-381
.
Abstract.
Link.
Tracking refers to the practice of dividing students by ability or achievement. Students may be tracked within schools by placing them into different classrooms based on achievement, which is the typical practice in countries such as the United States or Canada. Alternatively, students could be streamed into different schools, with either vocational or academic emphases, as has been practiced commonly in Europe. Proponents of tracking argue that tracking can increase the efficiency of schooling by focusing on the needs of distinct groups of students. Opponents' main concerns relate to perpetuating and aggravating inequality. Evaluating effects of tracking on average student achievement and the distribution of achievement is difficult, in part because of variations from study to study and from country to country in the characteristics of the tracking system. Early work, largely in the United States and Britain, used variation across and within schools, and often found that tracking increased inequality in achievement. But more recent work in the United States has questioned these findings, suggesting that careful attention to endogenous placement of students into classrooms and endogenous use of tracking across schools changes results dramatically. Experimental studies on within-school tracking in the United States have produced mixed results, and one experiment in Kenya suggests that tracking can boost the achievement of both low-achieving and high-achieving students. A large body of work now uses geographical variation across regions, countries, grades, and time to identify the effects of tracking. These studies for the most part suggest that tracking aggravates inequality in outcomes. These results are fairly strong, and may be identifying the more dramatic effects that obtain when students are separated into vocational schools and more academically oriented schools, as opposed to the effects of within-school tracking. The paper concludes with an outline of how future research might better categorize and rigorously evaluate the real-world nuances of tracking. [close]
-
Biewen, Martin and Madalina Tapalaga (2017).
Life-cycle educational choices in a system with early tracking and ‘second chance’ options.
In: Economics of Education Review
56
, 80-94
.
Abstract.
Link.
We study life-cycle educational transitions in the German education system which is characterized by early tracking and institutionalized branches of academic and vocational training, but with the possibility to revise earlier decisions at later stages. Our econometric model covers all major transitions ranging from primary education through secondary schooling to different forms of tertiary education and vocational training. We consider the role of previous decisions and background characteristics at each decision node and also study ‘indirect’ routes through the system. Our results suggest that a considerable proportion of the population takes ‘second chance’ decisions but that these decisions are as socially selective as the standard routes through the system. We also model unobserved heterogeneity and document the sorting of individuals along unobserved characteristics across the stages of the system. [close]
-
Biewen, Martin, Bernd Fitzenberger, Aderonke Osikominu and Marie Paul (2014).
The Effectiveness of Public Sponsored Training Revisited: The Importance of Data and Methodological Choices.
In: Journal of Labor Economics
32(4)
, 837-897
.
Abstract.
Link.
This article revisits the effectiveness of public-sponsored training programs for Germany accounting for dynamic selection into heterogeneous programs. We carefully assess to what extent various aspects of our empirical strategy, such as conditioning flexibly on employment and benefit histories, the availability of rich data, handling of later program participations, and further methodological choices affect our estimates. Our results imply pronounced negative lock-in effects in the short run and positive medium-run effects on employment and earnings when job-seekers enroll after having been unemployed for some time. We find that data and specification issues can have a large effect. [close]
-
Bishop, John (1998).
Occupation Specific Versus General Education and Training.
In: Annals of the American Academy of Political and Social Science
559(1)
, 24-38
.
Abstract.
Link.
In this article, John Bishop summarizes research from many sources concerning the current debate over occupation-specific versus general education and training. He argues against a recommendation made by the Economist magazine that government scale back its support of school-based occupation-specific training and instead focus on academic education. Research shows, to the contrary, that productivity derives directly from social abilities (such as good work habits and people skills) and cognitive skills that are specific to the job and occupation, not from reading, writing, and mathematics skills. Old skills are becoming obsolete more rapidly, so new skills must be learned more frequently. This implies a greater overall need for occupational training, not a reduced need. The rise in job turnover has made employers more reluctant to hire inexperienced workers and provide them skill training, so the need for school-based vocational training has never been greater. Occupational turnover has been declining, so the payback period of occupational skills has been rising. [close]
-
Bishop, John H. and Ferran Mane (2005).
Raising Academic Standards and Vocational Concentrators: Are They Better off or Worse off?.
In: Education Economics
13(2)
, 171-187
.
Abstract.
Link.
In this paper we measure the impacts of tougher graduation requirements on course-taking patterns, college attendance and completion, and post-high school labor market outcomes for vocational concentrators and non-concentrators. Our main goal was to assess whether vocational education students were specifically affected (positively or negatively) by the policies’ heavy emphasis on the academic part of the high school curriculum. Our results show how requiring higher number of academic credits to graduate and introducing a Minimum Competency Examination help high school graduates to be more successful in the labor market, but reduce their chances of obtaining a college degree. Vocational concentrators are better off in Minimum Competency Examination states. The positive signal they send to employers reinforces the occupational skills that vocational concentrators possess. [close]
-
Bishop, John H. and Ferran Mane (2004).
The impacts of career-technical education on high school labour market success.
In: Economics of Education Review
23(4)
, 381-402
.
Abstract.
Link.
The paper assesses the effects of offering upper-secondary students the opportunity to pursue vocational education in high school on completion rates and subsequent earnings. Analysis of international cross-section data found that nations enrolling a large proportion of upper-secondary students in vocational programs have significantly higher school attendance rates and higher upper-secondary completion rates. Test scores at age 15 and college attendance rates for people over age 20 were not reduced.
Analysis of 12 years of longitudinal data found that those who devoted about one-sixth of their time in high school to occupation-specific vocational courses earned at least 12% extra one year after graduating and about 8% extra seven years later (holding attitudes and ability in 8th grade, family background and college attendance constant). This was true both for students who did and did not pursue post-secondary education. Computer courses had particularly large effects on earnings eight years after graduating. [close]
-
Bjorklund, Anders and Christian Kjellstrom (2002).
Estimating the Returns To Investment in Education: How Useful Is the Mincer Equation?.
In: Economics of Education Review
21(3)
, 195-210
.
Abstract.
Link.
We examine how well the schooling coefficient in standard Mincer equations, estimated on Swedish data for 1968, 1981 and 1991, approximates the marginal internal rate of return to education. We find three cases where inference from the estimated schooling coefficient is misleading. First, the decline in return to schooling from 1968 to 1981 is mainly concentrated to college education, whereas the return to high school education is stable. Second, the rate of return is sensitive to the assumption made about the length of working life, or the retirement decision. Third, both the schooling coefficient and the internal rate of return give misleading information about the value of adult education. By comparing the present value of lifetime earnings between youth and adult education, we find large differences in favor of youth education, even though the schooling coefficient and the internal rate of return are the same. [close]
-
Brunello, Giorgio and Lorenzo Rocco (2017).
The Labor Market Effects of Academic and Vocational Education over the Life Cycle: Evidence Based on a British Cohort.
In: Journal of Human Capital
11(1)
, 106-166
.
Abstract.
Link.
Several commentators have argued that the short-term advantage of vocational versus academic education, which is a smoother school-to-work transition, trades off with long-term disadvantages, which are lower employment and/or lower wages. Using data based on the careers of individuals born in the United Kingdom in 1958, we find evidence of a trade-off, but only for real wages and only for the group with lower vocational education. These results are confirmed when the careers of individuals born in 1970 are examined. The presence of a trade-off does not imply, however, that individuals with vocational education have lower long-term utility. [close]
-
Brunello, Giorgio and Lorenzo Rocco (2015).
The effects of vocational education on adult skills and wages: What can we learn from PIAAC?.
OECD Social, Employment and Migration Working Papers 168, OECD Publishing.
Abstract.
Link.
In this report we investigate the effects of vocational education and training (VET) on adult skills and labour market outcomes by using the PIAAC survey. Data comparability across countries, the breath of countries involved, and the almost unique presence of information on assessed skills, training, earnings and employment makes this survey especially valuable to study the different facets of VET as compared to more academic education. [close]
-
Brunello, Giorgio and Massimo Giannini (2004).
Stratified or Comprehensive? The Economic Efficiency of School Design.
In: Scottish Journal of Political Economy
51(2)
, 173-193
.
Abstract.
Link.
We study the efficiency of secondary school design by focusing on the degree of differentiation between vocational and general education. Using a simple model of endogenous job composition, we analyze the interaction between relative demand and relative supply of skills and characterize efficient school design when the government runs schools and cares about total net output. We show that neither a comprehensive nor a stratified system unambiguously dominates the other system in terms of efficiency for all possibile values of the underlying parameters. Since comprehensive systems generate more equal labour market outcomes, it follows that the relationship between efficiency and equity in secondary education is not necessarily a trade off. [close]
-
Canton, Erik, Michèle Belot and Dinand Webbink (2007).
Does Reducing Student Support Affect Scholastic Performance? Evidence from a Dutch Reform.
In: Empirical Economics
32(2-3)
, 261-275
.
Abstract.
Link.
This paper investigates the impact of student support on performance and time allocation of students in Dutch higher education. In 1996 the maximum duration of grants was reduced by 1 year, and thereby limited to the nominal duration of the study program. This reform could have had substantial financial consequences for students. We evaluate the effects of the reform using a difference-in-differences approach. Our main findings are that after the reform, students early in their study (i) switched less to other programs, (ii) obtained higher grades, while (iii) they did not spend more time studying or working. In addition, for students not older than 20 years when they started their study we find larger effects on all performance variables (switching, percentage of completed courses, graduation in the first year and grade point averages). These findings are consistent with recent evidence on heterogeneous treatment effects for higher ability students. [close]
-
Card, David (2003).
Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems.
In: Econometrica
69(5)
, 1127-1160
.
Abstract.
Link.
This paper reviews a set of recent studies that have attempted to measure the causal effect of education on labor market earnings by using institutional features of the supply side of the education system as exogenous determinants of schooling outcomes. A simple theoretical model that highlights the role of comparative advantage in the optimal schooling decision is presented and used to motivate an extended discussion of econometric issues, including the properties of ordinary least squares and instrumental variables estimators. A review of studies that have used compulsory schooling laws, differences in the accessibility of schools, and similar features as instrumental variables for completed education, reveals that the resulting estimates of the return to schooling are typically as big or bigger than the corresponding ordinary least squares estimates. One interpretation of this finding is that marginal returns to education among the low-education subgroups typically affected by supply-side innovations tend to be relatively high, reflecting their high marginal costs of schooling, rather than low ability that limits their return to education. [close]
-
Card, David, Jochen Kluve and Andrea Weber (2010).
Active Labour Market Policy Evaluations: A Meta-Analysis.
In: Economic Journal
120(548)
, F452-F477
.
Abstract.
Link.
This article presents a meta-analysis of recent microeconometric evaluations of active labour market policies. We categorise 199 programme impacts from 97 studies conducted between 1995 and 2007. Job search assistance programmes yield relatively favourable programme impacts, whereas public sector employment programmes are less effective. Training programmes are associated with positive medium-term impacts, although in the short term they often appear ineffective. We also find that the outcome variable used to measure programme impact matters, but neither the publication status of a study nor the use of a randomised design is related to the sign or significance of the programme estimate. [close]
-
Dearden, Lorraine, Leslie McGranahan and Barbara Sianesi (2004).
An In-Depth Analysis of the Returns to National Vocational Qualifications Obtained at level 2.
CEE Discussion Papers 0046.
Link.
[close]
-
Dearden, Lorraine, Steven McIntosh, Michal Myck and Anna Vignoles (2002).
The Returns to Academic and Vocational Qualifications in Britain.
In: Bulletin of Economic Research
54(3)
, 249-274
.
Abstract.
Link.
This paper uses data from the 1991 sweep of the National Child Development Study (NCDS) and the 1998 Labour Force Survey (LFS) to provide a comprehensive analysis of the labour market returns to academic and vocational qualifications. The results show that the wage premia from academic qualifications are typically higher than from vocational qualifications. However, this gap is reduced somewhat, when we control for the amount of time taken to acquire different qualifications. This is particularly important for vocational courses, which generally take shorter time periods to complete. In the paper we also investigate how returns vary by gender, subsequent qualifications, and the natural ability of individuals. Finally, by comparing the NCDS results with those from the LFS, we estimate the bias that can result from not controlling for factors such as ability, family background and measurement error. The results reveal that the estimated returns in the NCDS equations controlling for ability, family background and measurement error are similar to the simple OLS estimates obtained with the LFS, which do not control for these factors. This suggests that the biases generally offset one another. [close]
-
Eichhorst, Werner, Núria Rodríguez-Planas, Ricarda Schmidl and Klaus Zimmermann (2015).
A Roadmap to Vocational Education and Training in Industrialized Countries.
In: Industrial and Labor Relations Review
68(2)
, 314-337
.
Abstract.
Link.
Young people have been among those most affected by the recent financial crisis. Vocational education and training (VET) is often viewed as the silver bullet for the youth joblessness problem. In this article, the authors provide a better understanding of VET in industrialized countries, proposing a typology with three types of vocational systems: 1) vocational and technical schools, 2) formal apprenticeships, and 3) dual apprenticeship systems that combine school training with a firm-based approach. They first describe the strengths and challenges of each system. They subsequently review the evidence of the effectiveness of VET versus general education and the relative effectiveness of the different VET systems. Results indicate that VET is a valued alternative beyond the core of general education and that the use of apprenticeships combined with institutional learning tends to be more effective than school-based VET. [close]
-
Epple, Dennis, Elizabeth Newlon and Richard Romano (2002).
Ability Tracking, School Competition and the Distribution of Educational Benefits.
In: Journal of Public Economics
83(1)
, 01-48
.
Abstract.
Link.
To study the effects of ability grouping on school competition, we develop a theoretical and computational model of tracking in public and private schools. We examine tracking's consequences for the allocation of students of differing abilities and income within and between public and private schools. Private schools tend to attract the most able and wealthiest students, and rarely track in equilibrium. Public sector schools can maximize attendance by tracking students. Public schools retain a greater proportion of higher-ability students by tracking, but lose more wealthy, lower-ability students to the private sector. Consequently, socioeconomic status is a predictor of track assignment in public schools. For the entire population, public-sector tracking has small aggregate effects on achievement and welfare, but results in significant redistribution from lower- to higher-ability students. [close]
-
Evans, Rupert and Joel Galloway (1973).
Verbal Ability and Socioeconomic Status of 9th and 12th Grade College Preparatory, General and Vocational Students.
In: Journal of Human Resources
8(1)
, 24-36
.
Abstract.
Link.
High schools in this country provide three basic programs: college preparatory, vocational education, and the general program. National data collected by Project TALENT have been analyzed for the first time and show that the two programs with defined goals, college preparatory and vocational education, enroll students from markedly different socioeconomic and academic ability populations. To provide separate schools for these two curriculums would result in a great deal of socioeconomic segregation. The general program, lacking defined goals other than a high school diploma, is the only program that shows a percentage increase in low academic ability and low socioeconomic students from the 9th to the 12th grade. This result holds for both males and females and is in spite of a very high dropout rate for both sexes. Implications of these findings are presented. [close]
-
Fersterer, Josef, Jörn-Steffen Pischke and Rudolf Winter-Ebmer (2008).
Returns to Apprenticeship Training in Austria: Evidence from Failed Firms.
In: Scandinavian Journal of Economics
110(4)
, 733-753
.
Abstract.
Link.
In the German-speaking countries, little is known about the payoffs to apprenticeship training for the participants. OLS estimates suggest that the returns are similar to those of other types of schooling. However, there is considerable heterogeneity in the quality of apprenticeships offered, and institutional descriptions suggest that there might be an important element of selection in who obtains an apprenticeship, and what type. In order to overcome the resulting ability bias, we estimate returns to apprenticeship training for apprentices in small Austrian firms which cease to operate. When a firm fails, current apprentices cannot complete their training in this firm. Since apprentices will be at different stages in their apprenticeship at that time, the failure of a firm will manipulate the length of the apprenticeship period completed for some apprentices. The time to firm failure can therefore serve as an instrument for the length of the apprenticeship completed both at the original firm and at other firms. We find instrumental variables returns which are similar or larger than the OLS returns in our sample, indicating relatively little selection. [close]
-
Golsteyn, Bart H. H. and Anders Stenberg (2017).
Earnings over the Life Course: General versus Vocational Education.
In: Journal of Human Capital
11(2)
, 167-212
.
Abstract.
Link.
Two common hypotheses regarding the relative benefits of vocational versus general education are (1) that vocational skills enhance relative short-term earnings and (2) that general skills enhance relative long-term earnings. Empirical evidence for these hypotheses has remained limited. Based on Swedish registry data of individuals in short (2-year) upper secondary school programs, this study provides a first exploration of individuals’ earnings across nearly complete careers. The descriptive earnings patterns indicate support for both hypotheses 1 and 2. The support holds when grade point average and family fixed effects are controlled for and also when enrollment in further education and fertility decisions are taken into account. [close]
-
Görlitz, Katja (2011).
Continuous Training and Wages: An Empirical Analysis Using a Comparison-Group Approach.
In: Economics of Education Review
30(4)
, 691-701
.
Abstract.
Link.
Using German linked employer–employee data, this paper investigates the short-term impact of on-the-job training on wages. The applied estimation approach was first introduced by Leuven and Oosterbeek (2008). Wages of employees who intended to participate in training but did not do so because of a random event are compared to wages of training participants. The estimated wage returns are statistically insignificant. Furthermore, the decision to participate in training is associated with sizeable selection effects. On average, participants have a wage advantage of more than 4% compared to non-participants. [close]
-
Görlitz, Katja (2010).
The Effect of Subsidizing Continuous Training Investments: Evidence from German Establishment Data.
In: Labour Economics
17(5)
, 789-798
.
Abstract.
Link.
This paper evaluates the impact of a training voucher program on establishments' investments in further training. The voucher program that was implemented in the German federal state of North Rhine-Westphalia increased training incentives for employees in small and medium-sized establishments by reducing training costs by 50%. The estimation is based on a quasi-experimental research design exploiting variation across time, regions and establishment size. Using establishment data, I find that the share of establishments that invest in training increased by 4–6 percentage points. Training intensity and the educational structure of participants remained unaffected among those establishments investing in training. [close]
-
Hall, Caroline (2012).
The Effects of Reducing Tracking in Upper Secondary School: Evidence from a Large-Scale Pilot Scheme.
In: Journal of Human Resources
47(1)
, 237-269
.
Abstract.
Link.
By exploiting an extensive pilot scheme that preceded an educational reform, this paper evaluates the effects of introducing a more comprehensive upper secondary school system in Sweden. The reform reduced the differences between academic and vocational tracks through prolonging and increasing the academic content of the latter. As a result, all vocational students became eligible for university studies. The results suggest that the policy change increased the amount of upper secondary schooling obtained among vocational students, but did not affect enrollment in university studies or students’ earnings later in life. [close]
-
Hanushek, Eric A. and Ludger Woessmann (2006).
Does Educational Tracking Affect Performance and Inequality? Differences in Differences Evidence across Countries.
In: Economic Journal
116(510)
, 63-76
.
Abstract.
Link.
We identify tracking effects by comparing differences in outcome between primary and secondary schools across tracked and non tracked systems. The results suggest that early tracking increases educational inequality. [close]
-
Hanushek, Eric A., Guido Schwerdt, Ludger Woessmann and Lei Zhang (2016).
General education, vocational education, and labor-market outcomes over the life-cycle.
In: Journal of Human Resources
forthcoming
.
Abstract.
Link.
Policy debates about the balance of vocational and general education programs focus on the school-to-work transition. But with rapid technological change, gains in youth employment from vocational education may be offset by less adaptability and thus diminished employment later in life. To test our main hypothesis that any relative labor-market advantage of vocational education decreases with age, we employ a difference-in-differences approach that compares employment rates across different ages for people with general and vocational education. Using micro data for 18 countries from the International Adult Literacy Survey, we find strong support for the existence of such a trade-off, which is most pronounced in countries emphasizing apprenticeship programs. Results are robust to accounting for ability patterns and to propensity-score matching. [close]
-
Heckman, James J., Robert LaLonde and Jeffrey Smith (1999).
The Economics and Econometrics of Active Labor Market Programs.
In: Orley Ashenfelter and David Card.
Handbook of Labor Economics, Vol. 3.
Amsterdam:
North Holland
, 1865-2097
.
Abstract.
Link.
Policy makers view public sector-sponsored employment and training programs and other active labor market policies as tools for integrating the unemployed and economically disadvantaged into the work force. Few public sector programs have received such intensive scrutiny, and been subjected to so many different evaluation strategies. This chapter examines the impacts of active labor market policies, such as job training, job search assistance, and job subsidies, and the methods used to evaluate their effectiveness. Previous evaluations of policies in OECD countries indicate that these programs usually have at best a modest impact on participants' labor market prospects. But at the same time, they also indicate that there is considerable heterogeneity in the impact of these programs. For some groups, a compelling case can be made that these policies generate high rates of return, while for other groups these policies have had no impact and may have been harmful. Our discussion of the methods used to evaluate these policies has more general interest. We believe that the same issues arise generally in the social sciences and are no easier to address elsewhere. As a result, a major focus of this chapter is on the methodological lessons learned from evaluating these programs. One of the most important of these lessons is that there is no inherent method of choice for conducting program evaluations. The choice between experimental and non-experimental methods or among alternative econometric estimators should be guided by the underlying economic models, the available data, and the questions being addressed. Too much emphasis has been placed on formulating alternative econometric methods for correcting for selection bias and too little given to the quality of the underlying data. Although it is expensive, obtaining better data is the only way to solve the evaluation problem in a convincing way. However, better data are not synonymous with social experiments. [close]
-
Heijke, Hans, Christoph Meng and Catherine Ris (2003).
Fitting To the Job: The Role of Vocational and General Competencies in Adjustment and Performance.
In: Labour Economics
10(2)
, 205-219
.
Abstract.
Link.
This paper provides new insight into the role of generic and vocational competencies during the transition from education to the labor market. Using data on the labor market situation of Dutch higher education graduates, we analyze the allocation over different educational domains, the incidence of on-the-job training and its impact on wages. The results reveal the different roles of competencies. Vocational competencies influence positively the chance of being matched to an occupation inside the own domain. Generic competencies influence positively both the chance of being matched to an occupation outside the own domain and the training participation. [close]
-
Hoque, Kim, Scott Taylor and Emma Bell (2005).
Investors in People: Market led Voluntarism in Vocational Education and Training.
In: British Journal of Industrial Relations
43(1)
, 135-153
.
Abstract.
Link.
Introduced in the UK in 1991, Investors in People (IiP) provides a benchmark for good training practice. It has become a central feature of the UK government's vocational education and training policy. This article aims to broaden the debate relating to IiP in two ways: first, by reviewing the existing evidence on recognition rates and its impact on training activity; and second, by exploring the new directions that IiP is taking in terms of its redesign and its overseas adoption. Finally, we consider the research agenda and the policy implications that arise from the review. [close]
-
Jacobson, Louis, Robert LaLonde and Daniel G. Sullivan (2005).
Estimating the Returns to Community College Schooling for Displaced Workers.
In: Journal of Econometrics
125(1-2)
, 271-304
.
Abstract.
Link.
Studies show that high-tenure displaced workers typically incur substantial long-term earnings losses. As these losses have become increasingly apparent, policy makers have significantly expanded resources for retraining, much of which takes place in regular community college classes. To analyze the effectiveness of such training, we link administrative earnings records with the community college transcript records of workers displaced from jobs during the first half of the 1990s in Washington State. We explore several issues of statistical specification for regression models quantifying the impact of community college credits on earnings. These include (i) the need to allow for a transition period immediately after the end of workers’ schooling when their earnings may be temporarily depressed, (ii) whether earnings gains are strictly proportional to credits earned, and (iii) how to model worker-specific unobserved heterogeneity. In our preferred specification, we find that the equivalent of an academic year of community college schooling raises the long-term earnings of displaced workers by an average of about 9 percent for men and about 13 percent for women. However, these average returns mask substantial variation in the returns associated with different types of courses. On the one hand, we estimate that an academic year of more technically oriented vocational and academic math and science courses raise earnings by about 14 percent for men and 29 percent for women. On the other hand, we estimate that less technically oriented courses yield very low and possibly zero returns. About one third of the increase in earnings associated with more technically oriented vocational and academic math and science courses is estimated to be due to increases in wage rates, with the remainder attributable to increased hours of work. [close]
-
Keep, Ewart (1998).
Vocational Education and Training and Economic Performance.
In: Tony Buxton, Peter Chapman and Paul Temple (eds.).
Britain's Economic Performance.
London:
Routledge
.
[close]
-
Kiefer, Nicolas (1979).
Population Heterogeneity and Inference from Panel Data on the Effects of Vocational Education.
In: Journal of Political Economy
87(5)
, 213-226
.
Abstract.
Link.
This paper considers a model of earnings over time which incorporates individual effects and time effects without assuming that these effects are orthogonal to the variable of primary interest. The central coefficient is the effect of participation in a Manpower Development and Training Act training program on the earnings of trainees. Since the training status of (some) individuals in the sample changes during the period of the sample, both pre- and posttraining contrasts and trainee-nontrainee contrasts in earnings can be made. An estimate of the cross-section bias in a training coefficient can be made directly. The extent of the analogous bias in the education coefficient in regression studies is a point of current debate. The cross-section bias in the sample analyzed is large, and the estimated effect of training is small and positive. [close]
-
Krueger, Dirk and Krishna Kumar (2004).
US-Europe Differences in Technology-Driven Growth: Quantifying the Role of Education.
In: Journal of Monetary Economics
51(1)
, 161-190
.
Abstract.
Link.
European economic growth has been weak, compared to the US, since the 80s. In previous work (Krueger and Kumar, 2003), we argued that the European focus on specialized, vocational education might have been effective during the 60s and 70s, but resulted in a growth gap relative to the US during the subsequent information age, when new technologies emerged more rapidly. In this paper, we extend our framework to assess the quantitative importance of education policy, when compared to labor market rigidity and product market regulation, other policy differences more commonly suggested to be responsible for US-Europe differences. A assigns a major role to education policy in explaining US-Europe growth differences. [close]
-
Lechner, Michael, Ruth Miquel and Conny Wunsch (2011).
Long-Run Effects of Public Sector Sponsored Training in West Germany.
In: Journal of the European Economic Association
9(4)
, 742-784
.
Abstract.
Link.
We estimate the short-, medium-, and long-term effects of different types of government-sponsored training in West Germany using particularly rich data that allows us to control for selectivity by matching methods and to measure interesting outcome variables over eight years after a program's start. We use distance-weighted radius matching together with a bias removal procedure based on weighted regressions in order to increase the precision and robustness of standard matching estimators. We find negative employment effects in the short term for all program types, effects whose magnitude and persistence is directly related to program duration. In the longer term, training seems to increase employment rates by 10–20 percentage points. For most programs the longer-term positive effects seem to be sustainable over the eight-year observation period. [close]
-
Lindner, Axel (1998).
Modelling the German System of Vocational Education.
In: Labour Economics
5(4)
, 411-423
.
Abstract.
Link.
This paper aims at analyzing main features of the German vocational education. It builds on a simple model of firm specific human capital accumulation in case of learning by doing. A main result is a positive effect of government financed schooling on creating learning by doing jobs. This finding relies on simple strategic arguments and does not depend on long term labor contracts or any cross productivity effects between learning inside and outside the firm. [close]
-
Mane, Ferran (1999).
Trends in the Payoff To Academic and Occupation Specific Skills: The Short and Medium Run Returns To Academic and Vocational High School Courses for Non College Bound Students.
In: Economics of Education Review
18(4)
, 417-437
.
Abstract.
Link.
Using data from three longitudinal surveys of American high school students, I show that vocational courses helped non-college-bound students to start their work life more successfully. A comparison of the returns to academic and vocational course work for non-college-bound students who graduated in 1972, 1980 and 1992 finds that the short and medium term payoffs to vocational courses rose substantially between 1972 and 1980 and remained high in 1992. Holding a host of variables constant, academic course work had much smaller labour market payoffs than vocational course work. These findings contradict the often repeated claim that employers now seek workers with a good general education and are happy to teach the occupation specific skills necessary to do the job. High school students who do not plan to attend college full-time would be well advised to start studying a well paying occupation before they complete high school. [close]
-
McCall, Brian, Jeffrey Smith and Conny Wunsch (2016).
Government-Sponsored Vocational Training.
In: Eric A. Hanushek, Steven Machin, Ludger Woessmann.
Handbook of the Economics of Education, Vol. 5.
Amsterdam:
.
Abstract.
Link.
Scope: US, Canada, Western Europe, Oz; justify this scope Scope: Publicly provided / subsidized vocational training Three national types: US/Canada/UK, Central Europe, Northern Europe Basic service types everywhere: Training in job search skills Life skills training Adult basic education Classroom training in occupational skills Subsidized on-the-job training at private firms Conceptual and institutional links to regular post-secondary education. [close]
-
Meer, Jonathan (2007).
Evidence on the Returns to Secondary Vocational Education.
In: Economics of Education Review
26(5)
, 559-573
.
Abstract.
Link.
Vocational education in high schools has frequently been stigmatized as an anachronistic, dead-end path for students. We use data from the National Education Longitudinal Survey of 1988 to examine claims that students on a vocational track would benefit from a more academically rigorous education. Clearly, selection bias confounds attempts to untangle the effects of academic tracking on income after high school. Using an econometric framework that accounts for this bias, we find evidence of comparative advantage in tracking. [close]
-
Oosterbeek, Hessel, Dinand Webbink (2007).
Wage Effects of an Extra Year of Basic Vocational Education.
In: Economics of Education Review
26(4)
, 408-419
.
Abstract.
Link.
Until 1975 around half of all graduates from Dutch basic vocational schools finished a 3-years program, the other half finished a 4-years program. In 1975 all 3-years programs were extended to four years. This was accompanied by an increase of the compulsory school leaving age with one year. We evaluate the long-term wage effects of this extra year of basic vocational education using a difference-in-differences approach. The control group consists of graduates from basic vocational programs that did not change in length. We find no beneficial effect from the change. This result suggests that the target group of this policy gains equally from an extra year in vocational school as from an extra year of work experience. [close]
-
Oosterbeek, Hessel, Randolph Sloof and Joep Sonnemans (2007).
Who Should Invest in Firm Specific Training?.
In: Journal of Population Economics
20(2)
, 329-357
.
Abstract.
Link.
We study experimentally whether employers or workers should invest in specific training. Workers have an alternative trading opportunity that takes the form of either an outside option or a threat point. Theory predicts that with outside options, employers have (weakly) better investment incentives than workers do and should therefore be the investing party. With threat points, employers and workers are predicted to invest the same. Our results are, by and large, in line with these predictions. Due to offsetting inefficiencies in the bargaining stage, however, realized inefficiencies are remarkably similar across the different situations considered. [close]
-
Pischke, Jorn Steffen and Till von Wachter (2008).
Zero Returns to Compulsory Schooling in Germany: Evidence and Interpretation.
In: The Review of Economics and Statistics
90(3)
, 592-598
.
Abstract.
Link.
We estimate the impact of compulsory schooling on earnings using changes in compulsory schooling laws in West Germany after World War II. Most estimates in the literature indicate returns in the range of 10% to 15%. While our research design is very similar to studies for various other countries, we find a zero return. We find no evidence that this is due to labor market institutions or the apprenticeship training system in Germany. The result might be due to the fact that the basic skills most relevant for the labor market are learned earlier in Germany than in other countries. [close]
-
Pischke, Jörn-Steffen and Alan Manning (2006).
Comprehensive versus Selective Schooling in England and Wales: What do we know?.
IZA Discussion Paper No. 2072.
Abstract.
Link.
This paper looks at the reform of secondary education in the UK, from selective to comprehensive, and comes out with mixed results on the effects. [close]
-
Polidano, Cain and Domenico Tabasso (2016).
Fully integrating upper-secondary vocational and academic courses: A flexible new way?.
In: Economics of Education Review
55
, 117-131
.
Abstract.
Link.
The tracking of students in upper-secondary school is often criticised for narrowing the post-secondary pathways of student in the vocational education and training (VET) track, which can stigmatise VET. To tackle this problem, countries have introduced courses that integrate aspects of VET and academic study, which provide the dual purpose of preparing students for work and vocational study and providing university pathways for more academic students in the VET track. In this study we assess the latter purpose by examining the outcomes of university aspirants who take these courses in their final year of school. Using rich survey and administrative data from Australia and propensity score matching we find that these courses are associated with lower academic performance and a lower chance of attaining a university offer. Decomposition results show that poor performance in integrated courses is the main driver, which points to potential tension between the two purposes. [close]
-
Psacharopoulos, George (1988).
Vocational Education.
In: Special Issue of International Review of Education
34(2)
.
Link.
[close]
-
Quintini, Glenda and Thomas Manfredi (2009).
Going Separate Ways? School-to-Work Transitions in the United States and Europe.
OECD Social, Employment and Migration Working Paper No. 90.
Abstract.
Link.
This paper derives school-to-work transition pathways in the United States and Europe between the late 1990s and the early 2000s. To do so, it uses Optimal Matching, a technique developed to sequence DNA. The key advantage of using this technique is that, rather than focusing on a specific point in time or a single destination, such as employment, inactivity or unemployment, they convey information on all activities undertaken by youth over the transition period, their sequence and their persistence. Strong similarities are found between the United States and Europe. However, pathways in the United States are characterised by significantly more dynamism than in Europe: youth in employment tend to change jobs more frequently while inactive or unemployed youth are more likely to experience several short spells rather than a single long one. School-to-work transition pathways in the United States also involve less time spent in unemployment than in Europe. The share of school-leavers involved in pathways dominated by employment is larger in the United States than in Europe and non-employment traps are less frequent in the United States. The most successful European countries in terms of school-to-work transitions are those where apprenticeships are widespread. On the other hand, European countries with a high incidence of temporary work among youth have a significantly smaller share of youth belonging to pathways dominated by employment and a larger share of youth in pathways characterised by frequent job changes separated by long unemployment spells. At the individual level, qualifications, gender, ethnicity and motherhood are found to influence the probability of disconnecting from the labour market and education for a prolonged period of time. Overall, the analysis shows the potential of Optimal Matching as a descriptive tool for the study of school-to-work transitions. It also tentatively explores how pathways obtained through Optimal Matching could be used for further analysis to draw policy-relevant conclusions. At present, data availability appears to be the main barrier to fully exploiting this novel technique. [close]
-
Ryan, Paul (2001).
The school-to-work transition: a cross-national perspective.
In: Journal of Economic Literature
39(1)
, 34-92
.
Abstract.
Link.
School-to-work patterns and issues are discussed for seven economies (France, Germany, Japan, the Netherlands, Sweden, the United Kingdom, and the United States). The emphasis is placed on differences across countries in the current labor market position of young people and recent trends therein, along with the institutions that regulate youth education, training, and employment. The power of public policies - including labor market deregulation, labor market programs, vocationalization of education, and apprenticeship - to improve youth outcomes is discussed, drawing on national evaluation literatures. Evidence of extensive policy failure points up the need to develop nationally appropriate institutions to improve school-to-work transitions. [close]
-
Stenberg, Anders, Xavier de Luna and Olle Westerlund (2012).
Can Adult Education Delay Retirement from the Labour Market?.
In: Journal of Population Economics
25(2)
, 677-696
.
Abstract.
Link.
We examine whether adult education delays retirement to potentially increase labour force participation among the elderly, a mechanism suggested in the OECD strategy for “active ageing” and the “Lisbon strategy” of the EU. Using register data from Sweden, we analyse transcripts from adult education for the period 1979–2004 and annual earnings 1982–2004. We match samples of treated individuals, in adult education 1986–1989, and untreated on the propensity score. The timing of exit from the workforce is assessed by non-parametric estimation of survival rates in the labour force. The results indicate no effects of adult education on the timing of retirement. [close]
-
Wolter, Stefan C. and Paul Ryan (2011).
Apprenticeship.
In: Eric Hanushek, Stephen Machin and Ludger Woessmann.
Handbook of Economics of Education .
Elsevier
, 521-576
.
Abstract.
Link.
Apprenticeship varies greatly across countries, in terms of both quantity (numbers trained) and quality (skill content); and across sectors and occupations within countries, in terms of its provision and finance by employers. This chapter outlines recent advances in both areas. Some firms engage in apprenticeship training, others do not; some of those that do, invest in their apprentices, whereas others make a surplus on them. Despite the advances of the last two decades, there is as yet no “general theory” to explain the full range of financial attributes seen in practice within, let alone between, countries. Indeed recent theoretical efforts have focused excessively on specific circumstances in occupational labor markets, and neglected the potential sensitivity of their conclusions to changes in assumptions about labor markets, for both skilled workers and trainees. We also consider evaluations of the benefits of apprenticeship for individuals. Finally, the chapter considers the coordination mechanisms, principally employer bodies (associations, chambers) and employee representation and social partnership (trade unions, works councils, and joint regulatory bodies). Economic analysis indicates various ways in which such institutions may affect economic efficiency. Diversity of institutions across the countries with successful apprenticeship systems suggests, however, that there is no unique recipe for success. [close]