Research

Many countries consider expanding vocational curricula in secondary education to boost skills and labour market outcomes among non-university-bound students. However, critics fear this could divert other students from more profitable academic education. We study labour market returns to vocational education in England, where until recently students chose between a vocational track, an academic track and quitting education at age 16. Identification is challenging because self-selection is strong and because students’ next-best alternatives are unknown. Against this back-drop, we leverage multiple instrumental variables to estimate margin-specific treatment effects, i.e., causal returns to vocational education for students at the margin with academic education and, separately, for students at the margin with quitting education. Identification comes from variation in distance to the nearest vocational provider conditional on distance to the nearest academic provider (and vice-versa), while controlling for granular student, school and neighbourhood characteristics. The analysis is based on population-wide administrative education data linked to tax records. We find that the vast majority of marginal vocational students are indifferent between vocational and academic education. For them, vocational enrolment substantially decreases earnings at age 30. This earnings penalty grows with age and is due to wages, not employment. However, consistent with comparative advantage, the penalty is smaller for students with higher revealed preferences for the vocational track. For the few students at the margin with no further education, we find merely tentative evidence of increased employment and earnings from vocational enrolment.

Firms have two ways to ensure access to a skilled workforce: they can train their employees to the required level of skill or they can hire workers who are already skilled. Training is costly and an increase in the availability of skilled workers may dissuade firms from providing it. In this paper we study the impact of a large increase in net migration to the UK on workers’ participation in vocational training. We use administrative information on publicly-funded workplace training capturing provision of training in nationally-recognised sector-wide general skills. We consider variation in migration inflows across local labour markets using a shift-share IV approach to deal with migrants’ endogenous sorting across regions or occupations. Our evidence suggests that higher migration intensity led to a reduction in training participation among workers. But effects are concentrated in types of training that are less valuable and among workers who are less likely to benefit from it (in terms of higher earnings).

Some countries, notably those which have long had a weak history of vocational education like the UK and the US, have recently seen a rapid expansion of hybrid schools which provide both general and vocational education. England introduced ‘University Technical Colleges’ (UTCs) in 2010 for students aged 14 to 18. 48 UTCs are currently open. We use a spatial instrumental variable approach based on geographical availability to evaluate the causal effect of attending a UTC on student academic and vocational achievement and on their labour market outcomes. For those pupils who enter the UTC at a non-standard transition age of 14, UTCs dramatically reduce their academic achievement on national exams at age 16. However, for students who enter at a more conventional transition age of 16, UTCs boost vocational achievement without harming academic achievement. They also improve achievement in STEM qualifications, and enrolment in apprenticeships. By age 19, UTC students are less likely to be unemployed and more likely to study STEM at university.

The importance of apprenticeships for early labour market transitions varies across countries and over time. In recent times, there has been a policy drive to increase the number of people undertaking apprenticeships in England. This is regarded as important for addressing poor productivity. We investigate whether there is a positive return to undertaking an apprenticeship for young people. We use detailed administrative data to track recent cohorts of young school leavers as they transition to the labour market. Our results suggest that apprenticeships lead to a positive average earnings return (at least in the short run), although there is stark variation between sectors. This is an important driver of the gender gap in earnings. 

Most students do not follow the ‘academic track’ (i.e. A-levels) after leaving school and only about a third of students go to university before the age of 20. Yet progression routes for the majority that do not take this path but opt for vocational post-compulsory education are not as well-known, which partly has to do with the complexity of the vocational education system and the difficulty of deciphering available data. If we are to tackle long-standing problems of low social mobility and a long tail of underachievers, it is essential that post-16 vocational options come under proper scrutiny. This paper is a step in that direction.

We use linked administrative data to track decisions made by all students in England who left compulsory education after having undertaken the national examination – the General Certificate of Secondary Education (GCSE) – at age 16 in the year 2009/10. We track them up to the age of 21, as they progress through the education system and (for some) into the labour market. We categorise the many different types of post-16 qualifications into several broad categories and we look at the probability of achieving various educational and early labour market outcomes, conditional on the path chosen at age 17. We also take into account the influence of demographics, prior attainment and the secondary school attended. Our findings illustrate the strong inequality apparently generated by routes chosen at age 17, even whilst controlling for prior attainment and schooling up to that point.

Skills Bootcamps are short trainings course of up to 16 weeks for over 19 year olds who want to change career or progress in their jobs. They are co-sponsored by the UK government and employers and offered in sectors with skills shortages, including Digital and Green Skills. The evaluation will look at the effect of Skills Bootcamps participation on labour market outcomes. More information here