Impact of vocational education and training on adult skills and employment: An applied multilevel analysis

Abstract

Vocational education and training has played a central role in promoting the school-to-work transition of young people. Despite this role, the return to Vocational Education and Training (VET) has been neglected in previous studies. This paper aims to examine individual returns to VET over a lifespan and to assess the effects of national VET systems, including school-based and work-based VET systems, on economic outcomes. We use the OECD’s Program for the International Assessment of Adult Competencies (PIAAC) dataset for conducting our analyses. The results of this study indicate that vocational track graduates are more likely to have literacy skill disadvantages, short-term employment advantages, and long-term employment disadvantages compared to general track graduates. The most significant finding is that there are substantial differences between work-based and school-based VET systems with regard to their literacy and employment effects. Compared to VET graduates from general education-oriented countries, VET graduates from work-based VET-oriented countries are initially more likely to be employed, but that employment premium narrows faster over time. Therefore, a lifespan overview and the characteristics of national VET systems should enter into policy debates on national educational systems.