Is School the Best Route to Skills? Returns to Vocational School and Vocational Skills in Egypt

Abstract

This paper tests the assumption that formal education is the best route to job skills. The returns to formal vocational secondary schooling are compared to the returns to acquiring skills outside the education system, such as undertaking an apprenticeship, for male wage workers in Egypt. A unique longitudinal dataset with information on schooling and skills allows for causal inference about returns by comparing siblings. For recent cohorts, the estimated returns to formal vocational secondary education are the same as attaining no formal education. However, the returns to skills obtained outside of formal education are substantial.