IDEAS home Printed from https://ideas.repec.org/p/hhs/kthrec/2013_004.html
   My bibliography  Save this paper

The impact of vocational education and training on income in Sweden

Author

Listed:
  • Andersson, Roland

    (Department of Real Estate and Construction Management, Royal Institute of Technology)

  • Nabavi Larijani, Pardis

    (Division of Economics, Royal Institute of Technology)

  • Wilhelmsson, Mats

    (Centre for Banking and Finance - CEFIN - Royal Institute of Technology)

Abstract

The aim of this article is to investigate the impact of advanced vocational education and training (AVET) on earnings. We use a multiple longitudinal panel data set for the period 1996 to 2008. Moreover, we have a panel for eight different labour markets in Sweden. By estimating an income equation, we test, while controlling for selection bias, the impact, if any, of AVET on earnings. Ordinary least squares (OLS) estimates are compared with instrumental variable (IV) and Hausman–Taylor estimates, together with fixed effect estimates. We also restrict the sample to those individuals with a higher probability of attending vocational education and training. The results are rather robust and indicate that earnings are higher for individuals who have undertaken a vocational training programme. We use quantile regression techniques to estimate not only the mean return to vocational training effects but also distributional effects.

Suggested Citation

  • Andersson, Roland & Nabavi Larijani, Pardis & Wilhelmsson, Mats, 2013. "The impact of vocational education and training on income in Sweden," Working Paper Series 13/4, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    • Handle: RePEc:hhs:kthrec:2013_004
    as

    Download full text from publisher

    File URL: https://www.dropbox.com/s/wpzakvscw1gs8dl/WP201304.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Aysit Tansel & Fatma Bircan Bodur, 2012. "Wage Inequality and Returns to Education in Turkey: A Quantile Regression Analysis," Review of Development Economics, Wiley Blackwell, vol. 16(1), pages 107-121, February.
    2. Fleisher, Belton M. & Wang, Xiaojun, 2005. "Returns to schooling in China under planning and reform," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 265-277, June.
    3. Joop Hartog & Pedro Pereira & Jose Vieira, 2001. "Changing returns to education in Portugal during the 1980s and early 1990s: OLS and quantile regression estimators," Applied Economics, Taylor & Francis Journals, vol. 33(8), pages 1021-1037.
    4. Jörn-Steffen Pischke, 2007. "The Impact of Length of the School Year on Student Performance and Earnings: Evidence From the German Short School Years," Economic Journal, Royal Economic Society, vol. 117(523), pages 1216-1242, October.
    5. Ashenfelter, Orley & Ham, John, 1979. "Education, Unemployment, and Earnings," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 99-116, October.
    6. Heckman, James J. & Jacobs, Bas, 2009. "Policies to Create and Destroy Human Capital in Europe," IZA Discussion Papers 4680, Institute of Labor Economics (IZA).
    7. Hector Sala & José Silva, 2013. "Labor productivity and vocational training: evidence from Europe," Journal of Productivity Analysis, Springer, vol. 40(1), pages 31-41, August.
    8. Corrado Andini, 2010. "A dynamic Mincer equation with an application to Portuguese data," Applied Economics, Taylor & Francis Journals, vol. 42(16), pages 2091-2098.
    9. John Eric Fredland & Roger D. Little, 1980. "Long-Term Returns to Vocational Training: Evidence from Military Sources," Journal of Human Resources, University of Wisconsin Press, vol. 15(1), pages 49-66.
    10. Omar Arias & Walter Sosa-Escudero & Kevin F. Hallock, 2001. "Individual heterogeneity in the returns to schooling: instrumental variables quantile regression using twins data," Empirical Economics, Springer, vol. 26(1), pages 7-40.
    11. Jacobson, Louis & LaLonde, Robert & G. Sullivan, Daniel, 2005. "Estimating the returns to community college schooling for displaced workers," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 271-304.
    12. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    13. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-293, March.
    14. Jean-Louis ARCAND & Béatrice D'HOMBRES & Paul GYSELINCK, 2004. "Instrument Choice and the Returns to Education: New Evidence from Vietnam," Working Papers 200422, CERDI.
    15. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    16. Will Bartlett, 2009. "The Effectiveness Of Vocational Education In Promoting Equity And Occupational Mobility Amongst Young People," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 54(180), pages 7-39, January –.
    17. Alberto Abadie & Joshua Angrist & Guido Imbens, 2002. "Instrumental Variables Estimates of the Effect of Subsidized Training on the Quantiles of Trainee Earnings," Econometrica, Econometric Society, vol. 70(1), pages 91-117, January.
    18. Soo, Kwok Tong & Elliott, Caroline, 2010. "Does price matter? Overseas students in UK higher education," Economics of Education Review, Elsevier, vol. 29(4), pages 553-565, August.
    19. Oosterbeek, Hessel & Webbink, Dinand, 2007. "Wage effects of an extra year of basic vocational education," Economics of Education Review, Elsevier, vol. 26(4), pages 408-419, August.
    20. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-1398, November.
    21. Mika Maliranta & Satu Nurmi & Hanna Virtanen, 2010. "Resources in vocational education and post‐schooling outcomes," International Journal of Manpower, Emerald Group Publishing Limited, vol. 31(5), pages 520-544, August.
    22. Kshitija Dixit & Rupayan Pal, 2010. "The impact of group incentives on performance of small firms: Hausman-Taylor estimates," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(6), pages 403-414.
    23. Pedro Telhado Pereira & Pedro Silva Martins, 2004. "Returns to education and wage equations," Applied Economics, Taylor & Francis Journals, vol. 36(6), pages 525-531.
    24. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
    25. repec:pri:indrel:dsp01fb494841t is not listed on IDEAS
    26. James J. Heckman & Xuesong Li, 2004. "Selection bias, comparative advantage and heterogeneous returns to education: evidence from China in 2000," Pacific Economic Review, Wiley Blackwell, vol. 9(3), pages 155-171, October.
    27. Orley Ashenfelter & Cecilia Rouse, 1998. "Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 253-284.
    28. David Card, 1993. "Using Geographic Variation in College Proximity to Estimate the Return to Schooling," Working Papers 696, Princeton University, Department of Economics, Industrial Relations Section..
    29. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003. "The Returns to Education: Microeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 115-156, April.
    30. Reinhard Hujer & Stephan Thomsen & Christopher Zeiss, 2006. "The effects of vocational training programmes on the duration of unemployment in Eastern Germany," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(2), pages 299-321, June.
    31. Orley Ashenfelter & Colm Harmon & Hessel Oosterbeek, 1999. "A Review of Estimates of the Schooling/Earnings Relationship, with Tests for Publication Bias," Working Papers 804, Princeton University, Department of Economics, Industrial Relations Section..
    32. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
    33. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    34. Guilhem Bascle, 2008. "Controlling for endogeneity with instrumental variables in strategic management research," Post-Print hal-00576795, HAL.
    35. Yakusheva, Olga, 2010. "Return to college education revisited: Is relevance relevant?," Economics of Education Review, Elsevier, vol. 29(6), pages 1125-1142, December.
    36. Gao, Wenshu & Smyth, Russell, 2011. "Economic returns to speaking 'standard Mandarin' among migrants in China's urban labour market," Economics of Education Review, Elsevier, vol. 30(2), pages 342-352, April.
    37. Inmaculada Garcia & Jose-Alberto Molina & Maria Navarro, 2010. "The effects of education on spouses' satisfaction in Europe," Applied Economics, Taylor & Francis Journals, vol. 42(28), pages 3607-3618.
    38. Trostel, Philip & Walker, Ian & Woolley, Paul, 2002. "Estimates of the economic return to schooling for 28 countries," Labour Economics, Elsevier, vol. 9(1), pages 1-16, February.
    39. Ashenfelter, Orley & Harmon, Colm & Oosterbeek, Hessel, 1999. "A review of estimates of the schooling/earnings relationship, with tests for publication bias," Labour Economics, Elsevier, vol. 6(4), pages 453-470, November.
    40. Thomas Andren & Daniela Andren, 2006. "Assessing the employment effects of vocational training using a one-factor model," Applied Economics, Taylor & Francis Journals, vol. 38(21), pages 2469-2486.
    41. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
    42. Lawrence Hotchkiss, 1993. "Effects of Training, Occupation, and Training-Occupation Match on Wage," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 482-496.
    43. Bernhard Boockmann & Viktor Steiner, 2006. "Cohort effects and the returns to education in West Germany," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1135-1152.
    44. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, vol. 84(5), pages 1157-1173, December.
    45. repec:fth:prinin:317 is not listed on IDEAS
    46. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    47. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, March.
    48. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
    49. David Card, 1993. "Using Geographic Variation in College Proximity to Estimate the Return to Schooling," NBER Working Papers 4483, National Bureau of Economic Research, Inc.
    50. Michael P. Murray, 2006. "Avoiding Invalid Instruments and Coping with Weak Instruments," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 111-132, Fall.
    51. Corrado Andini, 2007. "Returns to education and wage equations: a dynamic approach," Applied Economics Letters, Taylor & Francis Journals, vol. 14(8), pages 577-579.
    52. Corrado Andini, 2007. "The total impact of schooling on within-groups wage inequality in Portugal," Applied Economics Letters, Taylor & Francis Journals, vol. 15(2), pages 85-90.
    53. Chernozhukov, Victor & Hansen, Christian, 2006. "Instrumental quantile regression inference for structural and treatment effect models," Journal of Econometrics, Elsevier, vol. 132(2), pages 491-525, June.
    54. Haizheng Li & Yi Luo, 2004. "Reporting errors, ability heterogeneity, and returns to schooling in China," Pacific Economic Review, Wiley Blackwell, vol. 9(3), pages 191-207, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paweł Strawiński & Paulina Broniatowska & Aleksandra Majchrowska, 2016. "Returns to vocational education. Evidence from Poland," Working Papers 2016-16, Faculty of Economic Sciences, University of Warsaw.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Balestra, Simone & Backes-Gellner, Uschi, 2017. "Heterogeneous returns to education over the wage distribution: Who profits the most?," Labour Economics, Elsevier, vol. 44(C), pages 89-105.
    2. Corrado Andini, 2022. "Tertiary education for all and wage inequality: policy insights from quantile regression," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 50(6), pages 1281-1296, November.
    3. Angel de la Fuente & Antonio Ciccone, 2003. "Human capital in a global and knowledge-based economy," UFAE and IAE Working Papers 562.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    4. Corrado Andini, 2010. "A dynamic Mincer equation with an application to Portuguese data," Applied Economics, Taylor & Francis Journals, vol. 42(16), pages 2091-2098.
    5. Daeheon Choi & Chune Young Chung & Ha Truong, 2019. "Return on Education in Two Major Vietnamese Cities," Sustainability, MDPI, vol. 11(18), pages 1-30, September.
    6. Andini, Corrado, 2009. "How Fast Do Wages Adjust to Human-Capital Productivity? Dynamic Panel-Data Evidence from Belgium, Denmark and Finland," IZA Discussion Papers 4583, Institute of Labor Economics (IZA).
    7. repec:zbw:rwirep:0065 is not listed on IDEAS
    8. Manuel Salas Velasco, 2004. "Rendimientos privados de las inversiones en educación superior a partir de ecuaciones de ingresos," Hacienda Pública Española / Review of Public Economics, IEF, vol. 169(2), pages 87-117, June.
    9. Michael Chletsos & Stelios Roupakias, 2020. "Education and wage inequality before and during the fiscal crisis: A quantile regression analysis for Greece 2006–2016," Review of Development Economics, Wiley Blackwell, vol. 24(4), pages 1333-1364, November.
    10. Colm Harmon & Hessel Oosterbeek, 2000. "The Returns to Education: A Review of Evidence, Issues and Deficiencies in the Literature," CEE Discussion Papers 0005, Centre for the Economics of Education, LSE.
    11. repec:ucn:wpaper:10197/1099 is not listed on IDEAS
    12. Antonio Caparrós Ruiz & Lucía Navarro Gómez & Mario Rueda Narváez, 2010. "Endogenous wage determinants and returns to education in Spain," International Journal of Manpower, Emerald Group Publishing Limited, vol. 31(4), pages 410-425, July.
    13. Denis Maguain, 2007. "Les rendements de l'éducation en comparaison internationale," Économie et Prévision, Programme National Persée, vol. 180(4), pages 87-106.
    14. Middendorf, Torge, 2008. "Returns to Education in Europe – Detailed Results from a Harmonized Survey," Ruhr Economic Papers 65, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    15. Torge Middendorf, 2008. "Returns to Education in Europe – Detailed Results from a Harmonized Survey," Ruhr Economic Papers 0065, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    16. Tushar Agrawal, 2011. "Returns to education in India: Some recent evidence," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2011-017, Indira Gandhi Institute of Development Research, Mumbai, India.
    17. Mirjam van Praag & Arjen van Witteloostuijn & Justin van der Sluis, 2009. "Returns for Entrepreneurs versus Employees: The Effect of Education and Personal Control on the Relative Performance of Entrepreneurs vis-a-vis Wage Employees," Tinbergen Institute Discussion Papers 09-111/3, Tinbergen Institute.
    18. Gounder, Rukmani & Xing, Zhongwei, 2012. "Impact of education and health on poverty reduction: Monetary and non-monetary evidence from Fiji," Economic Modelling, Elsevier, vol. 29(3), pages 787-794.
    19. Inmaculada Garc�a Mainar & V�ctor M. Montuenga G�mez, 2004. "Returns to education and to experience within the EU: are there differences between wage earners and the self-employed?," Documentos de Trabajo dt2004-08, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    20. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003. "The Returns to Education: Microeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 115-156, April.
    21. Sajjad Haider Bhatti & Jean Bourdon & Muhammad Aslam, 2013. "Economic Returns to Education in France: OLS and Instrumental Variable Estimations," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 18(2), pages 51-63, July-Dec.
    22. Le Wang, 2013. "How Does Education Affect the Earnings Distribution in Urban China?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(3), pages 435-454, June.

    More about this item

    Keywords

    Vocational training; Instrument variables; Hausman-Taylor; quantile regression;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:kthrec:2013_004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Cecilia Hermansson (email available below). General contact details of provider: https://edirc.repec.org/data/ifkthse.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.