In response to recent technological changes and the worsening outcomes of non-college educated workers, governments around the world are becoming more interested in whether different types of secondary education (vocational vs. general) might play a role in providing young people the skills they need to succeed after they graduate. Silliman and Virtanen (2019) studies labor-market returns to vocational versus general education – using a quasi-experiment created by the centralized admission process in Finland.
Admission to the vocational track increases annual income by 7 percent at age 31, and the benefits show no signs of diminishing with time. Moreover, admission to the vocational track does not increase the likelihood of working in jobs at risk of replacement by automation or offshoring. We observe significantly larger returns for people who express a preference for vocational education in their applications to secondary school and whose previous school performance was mediocre (at best). These findings, coming from a period characterized by rapid technological change, provide new evidence that vocational track may offer an important pathway into the labor market.