Is the Meister Vocational High School more cost-effective?

Abstract

As youth unemployment has worsened recently in Korea, as well as around the world, more attention is being paid to technical and vocational education and training programs. This paper aims to assess the economic viability and cost-effectiveness of the Meister High School (MHS) Program, a new type of Korean vocational high school program launched in 2010, against other investment options, in particular the regular vocational high school (RVHS) and general high school (GHS) programs. This investigation indicates that the net present value of investment in both the Meister and regular vocational high school programs is positive, and that they are therefore economically viable. However, the economic returns to investment in MHS are either equal to or less than that of investment in RVHS, and the cost-effectiveness of MHS is far below that of RVHS. Moreover, the economic rate of return to investment in RVHS was much higher than that for the general high school (GHS) followed by higher education program. Even when a third of RVHS graduates also pursued higher education while working, their economic internal rate of return was higher than that for the GHS followed by higher education. Therefore, in the future, it would be more efficient and advisable to modernize and expand regular vocational high schools than Meister or general high schools.