Labor Market Returns to Vocational Secondary Education
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Mikko Silliman
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Hanna Virtanen
- American Economic Journal: Applied Economics (Forthcoming)
Abstract
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.
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