Empirical investigations of costs and benefits of vocational education and training

Abstract

Although economic and sociological research concerning the costs and the benefits of vocational education and training has improved the information base needed for an in-depth cost-benefit assessment, several questions remain unanswered: How do the wages and productivity of VET workers differ to those of more generally educated workers? How do institutional frameworks influence cost and benefit structures of training for firms? How large are the benefits for firms using VET as a mean to meet their demand for skilled workers? The present thesis addresses these research gaps without claiming to answer all the open issues. In the first two chapters, the theoretical relationship between initial skill endowments (due to different educational pathways) and wages and productivity is analysed. Using industry-level panel data for Germany, Netherlands and the United Kingdom it is assessed whether productivity varies with the importance of the VET system in these countries. Chapter 3 compares experience-earnings profiles of workers with vocational and general education backgrounds in Germany, Netherlands and the United Kingdom. In chapter 4 the monetary value of the firm-specific component of German apprenticeship training is calculated by comparing the initial productivities and wages of externally recruited and internally trained workers in the same job, occupation and firm. Chapter 5 investigates the influence of employment protection legislation on the costs and compares benefits of vocational training in firms and the training behaviour of firms in Germany and Switzerland. In chapter 6 firm-level data is used to answer the question as to whether works councils may have an impact on firms' cost-benefit ratio of training. Chapter 7 analyses another form of direct training benefit to the firm: the saving of hiring costs for workers from the external labour market. The thesis closes with a short summary of the chapters and tentative conclusions on their meaning for research and policy. (BIBB-Doku)