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Labor Market Returns to Vocational Secondary Education

  • Mikko Silliman
  • Hanna Virtanen
American Economic Journal: Applied Economics
vol. 14, no. 1, January 2022
(pp. 197-224)
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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.

Citation

Silliman, Mikko, and Hanna Virtanen. 2022. "Labor Market Returns to Vocational Secondary Education." American Economic Journal: Applied Economics, 14 (1): 197-224. DOI: 10.1257/app.20190782

Additional Materials

JEL Classification

  • D15 Intertemporal Household Choice; Life Cycle Models and Saving
  • I21 Analysis of Education
  • I26 Returns to Education
  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • J31 Wage Level and Structure; Wage Differentials
  • O33 Technological Change: Choices and Consequences; Diffusion Processes
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