IDEAS home Printed from https://ideas.repec.org/a/spr/jlabrs/v58y2024i1d10.1186_s12651-024-00368-9.html
   My bibliography  Save this article

Academic or vocational education? A comparison of the long-term wage development of academic and vocational tertiary degree holders

Author

Listed:
  • Irene Kriesi

    (Swiss Federal University for Vocational Education and Training)

  • Fabian Sander

    (University of Applied Sciences and Arts Northwestern Switzerland FHNW)

Abstract

Education is a key determinant of wage development. The relationship between education and wages is particularly strong in countries with vocationally oriented educational systems and a clear distinction between general and vocational education, such as Germany and Switzerland. However, whether general and vocational education offer the same returns to education is an ongoing debate. Previous findings from international research are still inconclusive. Against this background and based on theoretical arguments from human capital and signalling theory and the task-specific learning-by-doing approach, our paper examines the long-term wage development of Swiss university and professional education degree holders from the time they obtain their tertiary degree until their late career. It asks how differences between the two groups in wage development may be explained. Our results, produced with regression decomposition methods, show that within the first 20 years after graduation, university degree holders experience steeper wage growth. An important reason for this difference is that university graduates move more often than vocational tertiary degree holders into well-paid labour market positions endowed with formal authority, management responsibility, and a large proportion of cognitive nonroutine tasks.

Suggested Citation

  • Irene Kriesi & Fabian Sander, 2024. "Academic or vocational education? A comparison of the long-term wage development of academic and vocational tertiary degree holders," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 58(1), pages 1-28, December.
  • Handle: RePEc:spr:jlabrs:v:58:y:2024:i:1:d:10.1186_s12651-024-00368-9
    DOI: 10.1186/s12651-024-00368-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s12651-024-00368-9
    File Function: Abstract
    Download Restriction: no

    File URL: https://libkey.io/10.1186/s12651-024-00368-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Eric A. Hanushek & Guido Schwerdt & Ludger Woessmann & Lei Zhang, 2017. "General Education, Vocational Education, and Labor-Market Outcomes over the Lifecycle," Journal of Human Resources, University of Wisconsin Press, vol. 52(1), pages 48-87.
    2. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    3. Ralph Stinebrickner & Todd Stinebrickner & Paul Sullivan, 2019. "Job Tasks, Time Allocation, and Wages," Journal of Labor Economics, University of Chicago Press, vol. 37(2), pages 399-433.
    4. Simone N. Tuor & Uschi Backes‐Gellner, 2010. "Risk‐return trade‐offs to different educational paths: vocational, academic and mixed," International Journal of Manpower, Emerald Group Publishing Limited, vol. 31(5), pages 495-519, August.
    5. Christina Gathmann & Uta Schönberg, 2010. "How General Is Human Capital? A Task-Based Approach," Journal of Labor Economics, University of Chicago Press, vol. 28(1), pages 1-49, January.
    6. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    7. Helen Connolly & Peter Gottschalk, 2000. "Differences in Wage Growth by Education Level: Do Less Educated Workers Gain Less from Work Experience?," Boston College Working Papers in Economics 473, Boston College Department of Economics, revised 26 Aug 2006.
    8. Bart H. H. Golsteyn & Anders Stenberg, 2017. "Earnings over the Life Course: General versus Vocational Education," Journal of Human Capital, University of Chicago Press, vol. 11(2), pages 167-212.
    9. Robert Gibbons & Michael Waldman, 2004. "Task-Specific Human Capital," American Economic Review, American Economic Association, vol. 94(2), pages 203-207, May.
    10. Irene Kriesi & Juerg Schweri, 2019. "Types of Education, Achievement and Labour Market Integration over the Life Course," Social Inclusion, Cogitatio Press, vol. 7(3), pages 58-64.
    11. Hannes Kröger & Jörg Hartmann, 2021. "Extending the Kitagawa–Oaxaca–Blinder decomposition approach to panel data," Stata Journal, StataCorp LP, vol. 21(2), pages 360-410, June.
    12. Rohrbach-Schmidt, Daniela & Tiemann, Michael, 2013. "Changes in workplace tasks in Germany : evaluating skill and task measures," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 46(3), pages 215-237.
    13. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
    14. Ben Jann, 2008. "The Blinder–Oaxaca decomposition for linear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 453-479, December.
    15. Nicole Jonker & Hans van Ophem & Joop Hartog, 2006. "Dual track or academic route for auditors: does it matter?," Applied Economics, Taylor & Francis Journals, vol. 38(9), pages 1019-1035.
    16. Oesch, Daniel, 2013. "Occupational Change in Europe: How Technology and Education Transform the Job Structure," OUP Catalogue, Oxford University Press, number 9780199680962.
    17. Simone N. Tuor & Uschi Backes‐Gellner, 2010. "Risk‐return trade‐offs to different educational paths: vocational, academic and mixed," International Journal of Manpower, Emerald Group Publishing Limited, vol. 31(5), pages 495-519, August.
    18. Daniela Rohrbach-Schmidt & Michael Tiemann, 2013. "Changes in workplace tasks in Germany—evaluating skill and task measures [Wandel der Tätigkeiten am Arbeitsplatz in Deutschland – Analysen von Skill und Task-Maßen]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 46(3), pages 215-237, September.
    19. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
    20. Anders Frederiksen & Takao Kato, 2018. "Human Capital and Career Success: Evidence from Linked Employer‐Employee Data," Economic Journal, Royal Economic Society, vol. 128(613), pages 1952-1982, August.
    21. Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December.
    22. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    23. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    24. Joop Hartog & Pedro Raposo & Hugo Reis, 2022. "Fluctuations in the wage gap between vocational and general secondary education: lessons from Portugal," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(2), pages 643-675, April.
    25. Combet, Benita & Oesch, Daniel, 2019. "The Gender Wage Gap Opens Long before Motherhood. Panel Evidence on Early Careers in Switzerland," SocArXiv sazxj, Center for Open Science.
    26. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
    27. Daniela Rohrbach-Schmidt, 2019. "Putting Tasks to the Test: The Case of Germany," Social Inclusion, Cogitatio Press, vol. 7(3), pages 122-135.
    28. Jacob A. Mincer, 1974. "Age and Experience Profiles of Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 64-82, National Bureau of Economic Research, Inc.
    29. Fabian Sander & Irene Kriesi, 2019. "Medium and Long-Term Returns to Professional Education in Switzerland: Explaining Differences between Occupational Fields," Social Inclusion, Cogitatio Press, vol. 7(3), pages 136-153.
    30. Giorgio Brunello & Lorenzo Rocco, 2017. "The Labor Market Effects of Academic and Vocational Education over the Life Cycle: Evidence Based on a British Cohort," Journal of Human Capital, University of Chicago Press, vol. 11(1), pages 106-166.
    31. Hans Heijke & Christoph Meng, 2011. "The effects of higher education programme characteristics on the allocation and performance of the graduates," Education Economics, Taylor & Francis Journals, vol. 19(1), pages 1-27.
    32. 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.
    33. Neal, Derek, 1995. "Industry-Specific Human Capital: Evidence from Displaced Workers," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 653-677, October.
    34. Dietrich, Hans & Patzina, Alexander, 2023. "Erwerbsverläufe von Personen mit allgemeiner Hochschulreife: Auf den Abschluss kommt es an - Universität im Vergleich zu anderen Hochschulen," IAB-Kurzbericht 20232, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    35. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    36. Nicole Jonker & Hans van Ophem & Joop Hartog, 2002. "Dual Track or Academic Route for Auditors," Tinbergen Institute Discussion Papers 02-121/4, Tinbergen Institute.
    37. Sicherman, Nachum, 1990. "Education and occupational mobility," Economics of Education Review, Elsevier, vol. 9(2), pages 163-179, June.
    38. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    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. Koomen, Miriam & Backes-Gellner, Uschi, 2022. "Occupational tasks and wage inequality in West Germany: A decomposition analysis," Labour Economics, Elsevier, vol. 79(C).
    2. Koomen, Miriam & Backes-Gellner, Uschi, 2022. "Occupational Tasks and Wage Inequality in Germany: A Decomposition Analysis," IZA Discussion Papers 15702, Institute of Labor Economics (IZA).
    3. Silvia Vannutelli & Sergio Scicchitano & Marco Biagetti, 2022. "Routine-biased technological change and wage inequality: do workers’ perceptions matter?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(3), pages 409-450, September.
    4. Arceo-Gómez, Eva O. & Campos-Vázquez, Raymundo M., 2014. "Evolución de la brecha salarial de género en México," El Trimestre Económico, Fondo de Cultura Económica, vol. 0(323), pages .619-653, julio-sep.
    5. Saule Kemelbayeva, 2020. "Returns to schooling in Kazakhstan: an update using a pseudo-panel approach," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(3), pages 437-487, September.
    6. Mustafizur Rahman & Marzuka Md. Al-Hasan, 2019. "Women in Bangladesh Labour Market: Determinants of Participation, Gender Wage Gap and Returns to Schooling," CPD Working Paper 124, Centre for Policy Dialogue (CPD).
    7. Carl Sanders & Christopher Taber, 2012. "Life-Cycle Wage Growth and Heterogeneous Human Capital," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 399-425, July.
    8. Dahl, Gordon B. & Rooth, Dan-Olof & Stenberg, Anders, 2020. "Long-Run Returns to Field of Study in Secondary School," IZA Discussion Papers 13508, Institute of Labor Economics (IZA).
    9. Elisabeth Bublitz, 2018. "Matching skills of individuals and firms along the career path," Oxford Economic Papers, Oxford University Press, vol. 70(2), pages 509-537.
    10. Gordon Dahl & Dan-Olof Rooth & Anders Stenberg, 2020. "High School Majors, Comparative (Dis)Advantage, and Future Earnings," NBER Working Papers 27524, National Bureau of Economic Research, Inc.
    11. Fabian Sander & Irene Kriesi, 2019. "Medium and Long-Term Returns to Professional Education in Switzerland: Explaining Differences between Occupational Fields," Social Inclusion, Cogitatio Press, vol. 7(3), pages 136-153.
    12. Maria Esther Oswald-Egg & Ursula Renold, 2019. "No Experience, No Employment: The Effect of Vocational Education and Training Work Experience on Labour Market Outcomes after Higher Education," KOF Working papers 19-469, KOF Swiss Economic Institute, ETH Zurich.
    13. Ralph Stinebrickner & Todd Stinebrickner & Paul Sullivan, 2019. "Job Tasks, Time Allocation, and Wages," Journal of Labor Economics, University of Chicago Press, vol. 37(2), pages 399-433.
    14. Polachek, Solomon W., 2008. "Earnings Over the Life Cycle: The Mincer Earnings Function and Its Applications," Foundations and Trends(R) in Microeconomics, now publishers, vol. 4(3), pages 165-272, April.
    15. Boris Kaiser, 2016. "Decomposing differences in arithmetic means: a doubly robust estimation approach," Empirical Economics, Springer, vol. 50(3), pages 873-899, May.
    16. Robert Gibbons & Michael Waldman, 2006. "Enriching a Theory of Wage and Promotion Dynamics inside Firms," Journal of Labor Economics, University of Chicago Press, vol. 24(1), pages 59-108, January.
    17. Ayaka Nakamura, 2019. "The Effect of Employer Tenure on Wages in Japan," OSIPP Discussion Paper 19E007, Osaka School of International Public Policy, Osaka University.
    18. Fossen, Frank M. & Büttner, Tobias J.M., 2013. "The returns to education for opportunity entrepreneurs, necessity entrepreneurs, and paid employees," Economics of Education Review, Elsevier, vol. 37(C), pages 66-84.
    19. Britta Matthes & Bernhard Christoph & Florian Janik & Michael Ruland, 2014. "Collecting information on job tasks—an instrument to measure tasks required at the workplace in a multi-topic survey [Die Erfassung von Job-Tasks in persönlichen Befragungen. Ein neues Instrument z," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 47(4), pages 273-297, December.
    20. Leighton, Margaret & Speer, Jamin D., 2020. "Labor market returns to college major specificity," European Economic Review, Elsevier, vol. 128(C).

    More about this item

    Keywords

    University education; Higher vocational education; Long-term wage development; Work tasks; Decomposition methods;
    All these keywords.

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

    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:spr:jlabrs:v:58:y:2024:i:1:d:10.1186_s12651-024-00368-9. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.