We study labor market returns to vocational versus general secondary education using a regression discontinuity design created by the centralized admissions process in Finland. Admission to the vocational track increases initial annual income, and this benefit persists at least through the mid-thirties, and present discount value calculations suggest that it is unlikely that life cycle returns will turn negative through retirement. Moreover, admission to the vocational track does not increase the likelihood of working in jobs at risk of replacement by automation or offshoring. Consistent with comparative advantage, we observe larger returns for people who express a preference for vocational education.
Silliman, Mikko, and Hanna Virtanen.
"Labor Market Returns to Vocational Secondary Education."
American Economic Journal: Applied Economics,
Intertemporal Household Choice; Life Cycle Models and Saving
Analysis of Education
Returns to Education
Human Capital; Skills; Occupational Choice; Labor Productivity
Wage Level and Structure; Wage Differentials
Technological Change: Choices and Consequences; Diffusion Processes