A tale of two trade-offs: Effects of opening pathways from vocational to higher education

Abstract

This paper studies the effects of a vocational secondary school reform implemented in Finland between 1999 and 2001. The reform extended vocational two-year programs to three years and made all graduates eligible to apply for university. For identification, we exploit the gradual implementation of the reform, and use a differences-in-differences approach and administrative register data up to 13 years after the reform. We find no long-term effect on enrollment in further education or labor market outcomes. However, our results illustrate that the reform increased the dropout probability. Thus, the benefits of opening pathways from vocational to higher education may be outweighed by the cost of a more demanding curriculum.