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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.
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.
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.
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.
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.
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.
The paper studies the returns to vocational and educational education in Britain.
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.
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.
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.
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.
In this paper, we develop a model of technology adoption and economic growth in which households optimally obtain either a concept-based, 'general' education or a skill-specific, 'vocational' education. General education is more costly to obtain, but enables workers to operate new technologies incorporated into production. Firms weigh the cost of adopting and operating new technologies against increased revenues and optimally choose the level of adoption. We show that an economy whose policies favor vocational education will grow slower in equilibrium than one that favors general education. Moreover, the gap between their growth rates will increase with the growth rate of available technology. By characterizing the optimal Ramsey education subsidy policy we demonstrate that the optimal subsidy for general education increases with the growth rate of available technology. Our theory suggests that European education policies that favored specialized, vocational education might have worked well, both in terms of growth rates and welfare, during the 60s and 70s when available technologies changed slowly. In the information age of the 80s and 90s when new technologies emerged at a more rapid pace, however, it may have suboptimally contributed to slow growth and may have increased the growth gap relative to the US.
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