Contesting the uncontested: The role of vocational education in school-to-work transitions Irena Kogan University of Mannheim.

Contesting the uncontested: The role of vocational education in school-to-work transitions

Irena Kogan

University of Mannheim

Youth and total unemployment rates in EU, 2015, 1st quarter

Germany

Austria

DenmarkMalta

Netherlands

Estonia

Czech

Republic

United Kingdom

Latvia

Slovenia

Lithuania

Hungary

Luxe

mbourg

Belgium

Sweden

Bulgaria

Poland

Ireland

Finland

Romania

France

Slovakia

Portugal

Cyprus

Italy

Croatia

Spain

Greece0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

55.0

Youth unemployment Total unemployment

The Uncontested

Advantages of (upper-)secondary school leavers with vocational qualifications as opposed to general ones

General vs. specific skills (Becker 1964)

Academic vs. vocational programs (Müller and Shavit 1998)

Advantages of dual system of vocational education and training (VET) in ensuring smooth school-to-work transitions

Incomplete information and hence

Difficulties in assessing the expected productivity of school leavers on part of employers (Spence 1973)

Lack of information on part of young job seekers (Mortensen and Pissarides 1999)

What makes the dual system successful? (Noelke and Gebel 2011)

Training in companies provides up-to-date skills (productive skills perspective)

is an opportunity for employers to obtain reliable estimates for youth‘s expected productivity (signalling perspective)

enables finding out about employees‘ not immediately observed abilities (selection)

Coordination between educational system and labour market, in particular, cooperation between different corporate actors (e.g., employers‘ associations and trade unions)

Insurance that vocational curricula are regularly maintained to reflect employer demand, increase the reliability of educational credentials and create employer-sponsored training places

Is dual system still effective in promoting a smooth labour market entry? Is it also so in

Central and Eastern Europe (CEE)?

Is enterprise-based training more effective than school based: Empirical evidence for CEE countries, macro approach

Speed of job entry ISEI of 1st job

Source: Kogan, Noelke and Gebel (2011)

Is enterprise-based training more effective than school based: Empirical evidence for CEE countries, micro approach

Croatia (Matković 2011):

No evidence for larger effectiveness of enterprise-based training compared to school-based training among lower vocational students; any training longer than 6 months speeds up job entry

Poland (Baranowska 2011):

Enterprise-based training provides no significant advantage over vocational school graduates trained in schools

Hungary (Noelke and Horn 2014):

The shift in training provision from enterprises to schools between 1994 and 2000 has increased male vocational school graduates’ unemployment rate by 10% within the first 2 years after graduation, whereas no effect of training on class position are reported.

Is enterprise-based training more effective than school based: Empirical evidence for other countries, micro approach (summary by Ryan 1998)

Pay

Favourable for male apprentices and less favourable for female apprentices in England and Wales (Payne 1995)

No advantages in Germany (Winkelmann 1994; Witte and Kalleberg 1995); disadvantages of female apprentices (Witte and Kalleberg 1995)

Employment (incidence and experience of unemployment and joblessness, incidence of long-duration jobs)

Significant advantages of apprentices in France and Germany (Affichard et al 1992; Winkelmann 1996, Frank and Pohlmeier 1996)

No significant difference or superior outcomes of full-time vocational schools in the Netherlands (van der Velden and Lodder 1995)

Is enterprise-based training more effective than school based: Empirical evidence for other countries, micro approach

The Netherlands (Plug and Groot 1998):

Initial advantages of apprentices, but hardly any differences in earnings, earnings growth and employment opportunities in the long run between workers with an apprenticeship and those who went to a vocational school

France (Bonnal, Mendes and Sofer 2002):

Male apprentices are often hired immediately by the firm in which they performed their apprenticeship, they perform better than vocational school leavers even if they switch to another firm (effects are stronger after correction for a selection bias)

Much smaller advantages among female apprentices

Germany (Hall 2012)

No differences in gross earnings among male vocational school leavers and apprentices

Among females, vocational school leavers earn more (differences in the female occupations offered within the dual and vocational school system)

Aims of the analyses

In light of the hitherto equivocal results revisit the thesis about the more favourable labour market entry chances among recent school leavers of dual system of VET compared to school-based VET with the newer and more comparable data via

Comparison of social and gender composition of VET graduates of both types in traditional dual-system German speaking countries and CEE countries

Multidimensional comparison of labour market entry patterns among VET graduates of both types in traditional dual-system German speaking countries and CEE countries (also differentiating by gender)

Data and variables

2009 ad hoc module on the entry of young people into the labour market, focus on upper-secondary school leavers who left education for the last time in 1993-2008Treatment variable: Organization of VET – dual system vs. school-basedOutcome variables: Chances of having a first job after leaving highest level of education (1) prior to leaving education, (2) in the same year as leaving education, (3) one year after leaving education, (4) two years after leaving education, (5) ISEI of the first job, (6) contract (temporary vs. permanent) of the first jobControl variables:

Level of education: ISCED 3c, ISCED 3a,b, ISCED 3 without differentiation

Parental education: ISCED 0-2 - low, ISCED 3-4 - medium, ISCED 5-6 - high, ISCED unknown

Ethnic origin (based on one’s own and parental country of birth): EU 15+EFTA, New EU, Other non-EU Europe, MENA (Arab) countries, Asian countries, other

Age: 15-19, 20-24, 25-29, 30-34

Gender

School leaving cohorts (from 1993 to 2008, annually)

Fields of education (ISCED 1 digit)

Countries: AT, CH, DE, DK, SE, FI, BE, ES, GR, CZ, HU, RO, SI

Incidence of vocational training at school and at work: descriptive evidence

School-based vocational training

Dual system

All analysed countries 52.14 47.86

ISCED 3c 42.68 57.32

ISCED 3ab or no distinction 56.04 43.96

German speaking countries 10.95 89.05

ISCED 3c 10.57 89.43

ISCED 3ab or no distinction 10.98 89.02

CEE countries 64.67 35.33

ISCED 3c 45.19 54.81

ISCED 3ab or no distinction 76.78 23.21

Gender composition of vocational training participation: descriptive evidence

School-based vocational training

Dual system

All analysed countries

Male 55.14 59.08

Female 44.86 40.92

German speaking countries

Male 38.19 54.89

Female 61.81 45.11

CEE countries

Male 55.19 63.76

Female 44.81 36.24

Social selectivity of vocational training participation: descriptive evidence

School-based vocational training

Dual system

German speaking countries

Parental low education 22.30 20.19

Parental medium education 62.68 65.09

Parental high education 15.01 14.72

CEE countries

Parental low education 42.33 62.67

Parental medium education 51.96 33.55

Parental high education 5.71 3.78

Labour market effects of the dual system vocational training compared to school-based vocational education

  All analysed countries German-speaking countries CEE countries

Job prior to leaving VET 0.02 (5.57) *** 0.11 (4.77) *** 0.01 (3.05) **

Job immediately after leaving VET 0.06 (6.21) *** 0.02 (0.74)   0.06 (5.70) ***

Job next year after leaving VET 0.04 (4.95) *** -0.05 (-2.31) * 0.05 (4.88) ***

Job 2 years after leaving VET 0.03 (3.95) *** -0.05 (-2.04) * 0.05 (4.47) ***

                   ISEI 1st job -1.30 (-7.76) *** -1.79 (-3.37) *** -1.69 (-8.91) ***

Temporary 1st job -0.01 (-1.66)   -0.06 (-3.86) *** 0.00 (0.06)  

       Control variables included School-leaving cohorts,

parental education, ethnic origin, age, gender, field of education, level of education (3ab or 3c), countries: AT, CH, DE, DK, SE, FI, BE, ES, GR, CZ, HU, RO, SI

School-leaving cohorts,parental education, ethnic origin, age, gender, field of education, level of education (3ab or 3c), countries: AT, CH, DE

School-leaving cohorts,parental education, ethnic origin, age, gender, field of education, level of education (3ab or 3c), countries: CZ, HU, RO, SI

Note: * p<0.05, ** p<0.01, ***p<0.001. Average marginal effects with T-values in brackets for all variables but ISEI.

Labour market effects of the dual system vocational training compared to school-based vocational education

  All analysed countries German-speaking countries CEE countries

Men Women Men Women Men Women

Job prior to leaving VET 0.02 0.02 0.17 0.06 0.00 0.01

Job immediately after leaving VET 0.07 0.05 0.09 -0.02 0.06 0.07

Job next year after leaving VET 0.05 0.03 -0.04 -0.07 0.05 0.05

Job 2 years after leaving VET 0.04 0.02 -0.06 -0.05 0.05 0.03

 ISEI 1st job -1.34 -1.15 -2.25 -1.59 -1.71 -1.62

Temporary 1st job 0.00 -0.04 -0.05 -0.06 0.02 -0.02

       Control variables included School-leaving cohorts,

parental education, ethnic origin, age, gender, field of education, level of education (3ab or 3c), countries: AT, CH, DE, DK, SE, FI, BE, ES, GR, CZ, HU, RO, SI

School-leaving cohorts,parental education, ethnic origin, age, gender, field of education, level of education (3ab or 3c), countries: AT, CH, DE

School-leaving cohorts,parental education, ethnic origin, age, gender, field of education, level of education (3ab or 3c), countries: CZ, HU, RO, SI

Note: Bold is significant at 5% level at least. Average marginal effects with T-values in brackets for all variables but ISEI.

Summary and conclusions

Dual system is largely effective in ensuring quicker job entry, but at the price of lower status jobs.

In traditional dual-system countries, school-leavers are likely to retain jobs they obtained while in training. Those who fail, have substantially harder times than graduates of vocational schools in finding employment. This is particularly pronounced among men.

In CEE countries, dual system indeed helps in quicker job entry immediately after leaving VET. Gender differences are less pronounced.

In terms of compositional differences of VET participants, in CEE countries, more gender segregation and adverse selection by social origin is visible among participants of dual system.

Caveat: lack of information on abilities and other productivity-relevant but difficult-to-observe characteristics (like motivation, punctuality, etc.).

Thank you!

Irena Kogan

[email protected]