Vocational education, occupational choice and unemployment over the professional career

Abstract

This study investigates the relationship between occupational choice and unemployment over the professional career with German administrative linked employer–employee data that track more than 800,000 graduates from vocational education over 25 years. Using short-run fluctuations in local and sectoral occupation-specific labor demand as instruments, it finds that choosing an occupation that later turns out to suffer from low or negative employment growth has a statistically and economically significant impact on unemployment over the professional career. On average, an unanticipated one-standard deviation decrease in occupation-specific employment growth raises unemployment by about 116 days over the life cycle.