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Back to school: Labor-market returns to higher vocational schooling

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  • Böckerman, Petri
  • Haapanen, Mika
  • Jepsen, Christopher

Abstract

This paper examines the labor-market returns to a new form of postsecondary vocational education: vocational master's degrees. We use individual fixed effects models on a matched sample of students and non-students from Finland to capture any time-invariant differences across individuals. We find that attendance in vocational master's programs leads to an earnings increase of more than seven percent five years after entry. The estimated effect remains positive even if selection on unobservables is twice as strong as selection on observables. Earnings gains are similar by gender and age, but they are marginally higher for those in the health sector than for those in the business or technology and trades sector.

Suggested Citation

  • Böckerman, Petri & Haapanen, Mika & Jepsen, Christopher, 2019. "Back to school: Labor-market returns to higher vocational schooling," Labour Economics, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:labeco:v:61:y:2019:i:c:s0927537119300843
    DOI: 10.1016/j.labeco.2019.101758
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    References listed on IDEAS

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    Cited by:

    1. Sophie-Charlotte Klose & Johannes Lederer, 2020. "A Pipeline for Variable Selection and False Discovery Rate Control With an Application in Labor Economics," Papers 2006.12296, arXiv.org, revised Jun 2020.
    2. Jin Jiang & Hon-Kwong Lui, 2025. "Lifetime Earnings Premium of Higher Education: Evidence from the 40-Year Career of the 1951–1955 Birth Cohort in Hong Kong," Research in Higher Education, Springer;Association for Institutional Research, vol. 66(3), pages 1-20, May.
    3. Celeste K. Carruthers & Christopher Jepsen, 2020. "Vocational Education: An International Perspective," CESifo Working Paper Series 8718, CESifo.
    4. Kauhanen, Antti & Virtanen, Hanna, 2021. "Heterogeneity in Labor Market Returns to Adult Education," ETLA Working Papers 91, The Research Institute of the Finnish Economy.
    5. Oswald-Egg, Maria Esther & Renold, Ursula, 2021. "No experience, no employment: The effect of vocational education and training work experience on labour market outcomes after higher education," Economics of Education Review, Elsevier, vol. 80(C).
    6. Denzler, Stefan & Ruhose, Jens & Wolter, Stefan C., 2022. "'The Double Dividend of Training' – Labor Market Effects of Work-Related Continuous Education in Switzerland," IZA Discussion Papers 15619, IZA Network @ LISER.
    7. Timo Mitze & Nino Javakhishvili‐Larsen, 2020. "Graduate Migration and Early‐career Labor Market Outcomes: Do Education Programs and Qualification Levels Matter?," LABOUR, CEIS, vol. 34(4), pages 477-503, December.
    8. de la Fuente Stevens, Diego & Pelkonen, Panu, 2023. "Economics of minority groups: Labour-market returns and transmission of indigenous languages in Mexico," World Development, Elsevier, vol. 162(C).
    9. Baird Matthew D. & Bozick Robert & Zaber Melanie A., 2022. "Beyond traditional academic degrees: The labor market returns to occupational credentials in the United States," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-38, January.
    10. Denzler, Stefan & Ruhose, Jens & Wolter, Stefan C., 2025. "Labour market effects of work-related continuous education in Switzerland – evidence from administrative data," Economics of Education Review, Elsevier, vol. 107(C).

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    Keywords

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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