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Safety Valve or Sinkhole? Vocational Schooling in South Africa

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  • Pugatch, Todd

    ()
    (Oregon State University)

Abstract

As an alternative to traditional academic schooling, vocational schooling in South Africa may serve as a safety valve for students encountering difficulty in the transition from school to work. Yet if ineffective, vocational schooling could also be a sinkhole, offering little chance for success on the labor market. After defining the terms "safety valve" and "sinkhole" in a model of human capital investment with multiple schooling types, I test for evidence of these characteristics using a panel of urban youth in South Africa. I find support for the safety valve role of vocational schooling, with a small increase in vocational enrollment in response to grade failure, compared to a decline of 38 percentage points for academic enrollment. In contrast, I find no evidence that vocational schooling is a sinkhole, with wage and employment returns at least as large as those for academic schooling. The results suggest that vocational schooling plays an important role in easing difficult school to work transitions for South African youth.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7015.

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Length: 53 pages
Date of creation: Nov 2012
Date of revision:
Publication status: forthcoming in: IZA Journal of Labor and Development, 2014
Handle: RePEc:iza:izadps:dp7015

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Keywords: youth unemployment; vocational schooling; human capital investment; South Africa;

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  1. David Newhouse & Daniel Suryadarma, 2011. "The Value of Vocational Education: High School Type and Labor Market Outcomes in Indonesia," World Bank Economic Review, World Bank Group, vol. 25(2), pages 296-322, May.
  2. David Card & Pablo Ibarrar�n & Ferdinando Regalia & David Rosas-Shady & Yuri Soares, 2011. "The Labor Market Impacts of Youth Training in the Dominican Republic," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 267 - 300.
  3. Wößmann, Ludger & Hanushek, Eric A. & Zhang, Lei, 2012. "General Education, Vocational Education, and Labor-Market Outcomes over the Life-Cycle," Munich Reprints in Economics 19675, University of Munich, Department of Economics.
  4. Pugatch, Todd, 2012. "Bumpy Rides: School to Work Transitions in South Africa," IZA Discussion Papers 6305, Institute for the Study of Labor (IZA).
  5. Paul Bennell, 1996. "General versus vocational secondary education in developing countries: A review of the rates of return evidence," Journal of Development Studies, Taylor & Francis Journals, vol. 33(2), pages 230-247.
  6. Francis Teal & Godius Kahyarara, 2008. "The returns to vocational training and academic education: Evidence from Tanzania," Economics Series Working Papers WPS/2008-07, University of Oxford, Department of Economics.
  7. Fatma El-Hamidi, 2006. "General or Vocational Schooling? Evidence on School Choice, Returns, and 'Sheepskin' Effects from Egypt 1998," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 9(2), pages 157-176.
  8. Lam, David & Ardington, Cally & Leibbrandt, Murray, 2011. "Schooling as a lottery: Racial differences in school advancement in urban South Africa," Journal of Development Economics, Elsevier, vol. 95(2), pages 121-136, July.
  9. Abhijit Banerjee & Sebastian Galiani & Jim Levinsohn & Zo� McLaren & Ingrid Woolard, 2008. "Why has unemployment risen in the New South Africa?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 715-740, October.
  10. Orazio Attanasio & Adriana Kugler & Costas Meghir, 2011. "Subsidizing Vocational Training for Disadvantaged Youth in Colombia: Evidence from a Randomized Trial," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 188-220, July.
  11. Pushkar Maitra & Subha Mani, 2013. "Learning and Earning: Evidence from a Randomized Evaluation in India," Fordham Economics Discussion Paper Series dp2013-02, Fordham University, Department of Economics.
  12. Edmonds, Eric V., 2006. "Child labor and schooling responses to anticipated income in South Africa," Journal of Development Economics, Elsevier, vol. 81(2), pages 386-414, December.
  13. Bellows, John & Miguel, Edward, 2009. "War and local collective action in Sierra Leone," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1144-1157, December.
  14. Jeremy R. Magruder, 2010. "Intergenerational Networks, Unemployment, and Persistent Inequality in South Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 2(1), pages 62-85, January.
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