Trends in the Payoff to Academic and Occupation-Specific Skills: The Short and Midium Run Returns to Academic and Vocational High School Courses for Non-College Bound Students

Using data from three longitudinal surveys of American high school students, I show that vocational courses helped non-college-bound-students to start their work life more successfully, in terms of steadier employment, higher wages and higher earnings. A comparison of the returns to academic and vocational course work for non-college bound students who graduated in 1972, 1980 and 1992 finds that the short and medium term payoffs to vocational courses rose substantially between 1972 and 1980 and remained high in 1992. Holding past and present school attendance and a host of other variables constant, academic course work in high school had much smaller labor market payoffs than vocational course work. These findings contradict the oft repeated claim that employers now seek workers with a good general education and are happy to teach the occupation specific skills necessary to do the job. Instead, they imply that the payoff to the occupation specific skills developed in schools has risen along with the payoff to generic academic skills.