From vocational high school to higher vocational education: Effects on early career earnings and occupations

Using a longitudinal survey of vocational high school (VHS) students in China, this study examines the early-career effects of completing three-year vocational college (VC) education. We compare two education-to-employment pathways within the same cohort: direct labor market entry after VHS graduation and delayed entry after continuing on to complete VC education. To account for self-selection into continued education, we employ multiple methods, including an instrumental variables approach, sensitivity analysis, and a latent factor model. Our results show that VC completion substantially increases hourly wages upon labor market entry, but the wage premium is not statistically significant five years after VHS graduation, or two years after VC graduation. This pattern is driven largely by changes in the within-occupation wage premium, which dominates at entry but disappears or even reverses as VHS graduates accumulate work experience through their earlier labor market entry. In contrast, VC completion persistently improves occupational outcomes. VC graduates are more likely to enter and remain in nonroutine cognitive and higher-status occupations, both associated with faster wage growth. This suggests that the VC wage premium may reemerge or widen over time if these occupation-specific wage trajectories continue.