Using survey data to estimate the value of vocational qualifications

CVER's Steven McIntosh and Damon Morris, from University of Sheffield, look at the value of vocational qualifications

An important part of the research programme at CVER is to investigate the ‘returns’ to vocational qualifications, that is, the wage premiums earned by individuals who hold such qualifications. The results of such research provide important information to policy-makers about the value the labour market places on qualifications, as well as to individuals making decisions about what courses to pursue. Our work will provide up-to-date evidence on this topic, using a comprehensive range of data sets and methodologies.

Low-achieving teenagers: Evidence from France of the potential of low-cost interventions to clarify educational options

Eric Maurin from the Paris School of Economics is an expert advisor for CVER and presented this work at our recent conference

A simple programme of meetings facilitated by school principals and targeted at low-achieving 15 year olds can help them to identify educational opportunities that fit both their tastes and their academic ability. That is the central finding of a large-scale randomised experiment in Paris, conducted by economic researchers Dominique Goux, Marc Gurgand and Eric Maurin.

Their study, which is forthcoming in the Economic Journal, reveals that the outcome of an intervention in deprived neighbourhoods of Paris has been a very significant reduction in the number of students repeating educational years (‘grade repetition’) and in the number of students dropping out of school altogether. Compared with most existing interventions, this is a very low cost way to help young people who struggle at school to find the educational track most suited to their needs.

The Benefits of Alternatives to Conventional College: Labor-Market Returns to Proprietary Schooling

Christopher Jepsen, with Peter Mueser and Kyung-Seong Jeon, looks at the labor-market returns to U.S. proprietary schooling (often known as for-profit schooling)

Researchers are increasingly able to estimate the long-term wage returns to education using administrative data. This research reports findings from the US that were presented at the CVER seminar series in 2015 and have recently been published in a discussion paper (Jepsen et al. 2016).


In recent years, U.S. states have drastically reduced funding for education, and public community colleges and universities are particularly hard hit (Phelan, 2014). Proprietary schools (also known as for-profit schools) have been growing dramatically over the last decade, filling a gap in demand for postsecondary education, particularly for low-income and nonwhite individuals. The vast majority of students in this sector pursue vocational qualifications such as certificates and associate’s degrees in areas of study including health, transportation, and trades (i.e. construction, etc.).

Career guidance and apprenticeships: new research on vocational education

Guglielmo Ventura, CVER researcher, gives an account of the Centre's first annual conference

In early September, LSE hosted the first annual conference of the Centre for Vocational Education Research (CVER). This event proved to be a great opportunity to share insights from research on the economics of vocational education. Numerous researchers from the field came together to present evidence on how vocational education works in different countries and how it can be improved.

Reflections on the Employer Support for Higher Level Skills report

John Denham, Professorial Research Fellow of the IPA and former  Secretary of State for Innovation, Universities and Skills, reflects on report findings

For the past 20 years and longer, Ministers of all parties have wanted to see more employers support employees and apprentices to gain higher levels skills and higher education. With strong bi-partisan support in a relatively non-ideological area of policy it seems odd that employer supported higher skills have not become a more important part of the skills and education system.

If A-Levels aren’t for you, choices at age 16 could now get a whole lot simpler

CVER Director, Sandra McNally, on some of the recommendations of the recent Sainsbury report

The incoming British prime minister Theresa May has outlined a vision of a country that “works not for the privileged few but that works for every one of us … because we’re going to give people control over their lives”. A good place for her to start would be to make sure that the government sticks to its promise to implement the 34 recommendations set out in a new report that aims to radically simplify the education choices available for people after age 16.

The Sainsbury report, published on July 8, sets out a blueprint for technical education for young people and adults. The report is wide-ranging and ambitious, with recommendations that cover many aspects of the way education is provided. The government’s Post-16 Skills Plan, published on the same day, says the Sainsbury recommendation will be accepted “unequivocally where that is possible within existing budgets”.
Plethora of choices

The Institute for Apprenticeships must promote innovation and productivity

Dr Hilary Steedman has been engaged in research on apprenticeships, vocational training and labour market transitions since the early 1980s. Here she writes on the priorities for the new Institute for Apprenticeships.

In the past five years over two million individuals of working age have started an apprenticeship. Their life chances depend upon the quality and transferability of the skills standards that provide the structure for learning in apprenticeship.

Thousands of workplaces and facilitators are involved in delivering the skills embodied in apprenticeship skills standards. Effective governance is needed to ensure that, wherever the apprenticeship is provided, recognised skills and relevant knowledge have been developed and reliably assessed. This is a challenging and complex task requiring understanding of the perspectives of all the main actors - apprentices, business and the public interest.

Why do we bother with skills?

Marguerita Lane, a Senior Economic Consultant at London Economics, looks at the impact of literacy, numeracy and computer skills on earnings and employment outcomes

We expect skills in numeracy, literacy and ICT to be rewarded in the workplace through higher earnings and better employment opportunities. The 2012 Survey of Adult Skills confirms that this is the case. But can improvements in skills compensate for having a lower level of formal education? A new study by London Economics for the OECD finds that the answer depends on the type of skill under consideration – literacy, numeracy or ICT.

CVER – one year on

Sandra McNally, CVER's Director, reflects on the first year of the Centre for Vocational Education Research, and looks ahead

The BIS-funded Centre for Vocational Education Research was launched a year ago. Since then, vocational education has seen some important policy changes: The introduction of the apprenticeship levy, the announcement of the 3 million apprenticeship target, cuts in the non-apprenticeship adult skills budget, and ongoing restructuring of the further education college sector. The OECD has highlighted the dire state of basic skills among adults in England in a recent report, and policy makers are eager to improve the quality of what is being taught to adults by setting tougher conditions on what is funded.

So, in the midst of all these developments, what has CVER been doing?

Why do we bother with qualifications?

Simon Field, Senior Analyst, OECD Directorate for Education and Skills, on the relationship between qualifications and skills 

After all, they are just pieces of paper with fancy script and impressive-looking designs, and employers are surely interested in what people can actually do – their skills – rather than pieces of paper? A new OECD study, entitled Building Skills for All, A Review of England casts a spotlight on this question.

Qualifications are useful because they make skills visible. It is confidently assumed that the holder of a school-leaving certificate can read and understand instructions, and make calculations, and that those with university degrees can do much more. This confidence allows employers and others to decide how to make the best use of the skills of the labour force.

The labour market effects of academic and vocational education over the life cycle: Evidence from a British cohort

Giorgio Brunello and Lorenzo Rocco from the University of Padova look at the benefits and costs of academic and vocational education over the long-term.

Education economists often point out that individuals with a vocational education face a trade-off between short term benefits and long term costs. In the short term, this type of education facilitates the transition from school to work by providing ready to use skills. In the long term, however, vocational skills may depreciate relatively fast and individuals who specialize in these skills may be less capable of adapting to technical change than individuals endowed with a more general (academically oriented) education.
 
The view that the labour market benefits of vocational education are short lived has been recently supported by Hanushek, Schwerdt, Wossmann and Zhang (2015), who compare the life cycle patterns of employment (and wages) for individuals with vocational and academic education using cross-sectional data from the International Adult Literacy Survey (IALS). Since IALS does not allow to follow individuals over time and to distinguish between age and cohort effects, their estimates rely on the assumption that age - employment and age – wage profiles do not vary across cohorts, so that today’s old people in each education category are a good proxy for today’s young people when they will become old. What this literature does is compare someone’s wage with a vocational education at age 50 with the wage of someone holding a vocational qualification aged 30 in the same year, and assumes that today’s 30 year olds will fare in 20 years’ time like today’s 50 year olds. But it is possible that today’s 50 year olds do quite differently because the labour market they entered was very different or because the composition of the older labour force (e.g. in terms of qualifications) is quite different than among the younger cohorts. This makes it difficult to infer the true effects of vocational education by comparing older and younger workers.