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Vocational Schooling, Labor Market Outcomes, and College Entry

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  • Chen, Dandan

    (The World Bank)

Abstract

This paper examines the differentiated outcomes of vocational and general secondary academic education, particularly in terms of employment opportunities, labor market earnings, and access to tertiary education in Indonesia. With data from a panel of two waves of the Indonesia Family Life Survey in 1997 and 2000, the paper tracks a cohort of high school students in 1997 to examine their schooling and employment status in 2000. The findings demonstrate that: (1) attendance at vocational secondary schools results in neither market advantage nor disadvantage in terms of employment opportunities and/or earnings premium; (2) attendance at vocational schools leads to significantly lower academic achievement as measured by national test scores; and (3) There is no stigma attached to attendance at vocational schools that results in a disadvantage in access to tertiary education; rather, it is the lower academic achievement associated with attendance at vocational school that lowers the likelihood of entering college. The empirical approach of this paper addresses two limitations of the existing literature in this area. First, it takes into account the observation censoring issue due to college entry when evaluating labor market outcomes of secondary school graduates. Second, using an instrumental variable approach, the paper also treats endogeneity of household choice of vocational versus academic track of secondary education, teasing out the net effect of secondary school choice on labor market and schooling outcomes.

Suggested Citation

  • Chen, Dandan, 2009. "Vocational Schooling, Labor Market Outcomes, and College Entry," Policy Research Working Paper Series 4814, The World Bank.
    • Handle: RePEc:wbk:wbrwps:4814
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    References listed on IDEAS

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    1. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
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    3. David H. Greenberg & Charles Michalopoulos & Philip K. Robins, 2004. "What Happens To The Effects Of Government-Funded Training Programs Over Time?," Journal of Human Resources, University of Wisconsin Press, vol. 39(1).
    4. Bassi, Laurie J, 1984. "Estimating the Effect of Training Programs with Non-Random Selection," The Review of Economics and Statistics, MIT Press, vol. 66(1), pages 36-43, February.
    5. Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, vol. 17(2), pages 229-252, November.
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    Cited by:

    1. Guirong Li & Jiajia Xu & Liying Li & Zhaolei Shi & Hongmei Yi & James Chu & Elena Kardanova & Yanyan Li & Prashant Loyalka & Scott Rozelle, 2020. "The Impacts of Highly Resourced Vocational Schools on Student Outcomes in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(6), pages 125-150, November.
    2. David Newhouse & Daniel Suryadarma, 2011. "The Value of Vocational Education: High School Type and Labor Market Outcomes in Indonesia," The World Bank Economic Review, World Bank, vol. 25(2), pages 296-322, May.
    3. Joshua Aizenman & Yothin Jinjarak & Nam Ngo & Ilan Noy, 2018. "Vocational Education, Manufacturing, and Income Distribution: International Evidence and Case Studies," Open Economies Review, Springer, vol. 29(3), pages 641-664, July.
    4. World Bank, 2014. "Tertiary Education in Indonesia : Directions for Policy," World Bank Publications - Reports 20024, The World Bank Group.
    5. World Bank, 2010. "Education, Training and Labor Market Outcomes for Youth in Indonesia," World Bank Publications - Reports 2914, The World Bank Group.
    6. Prashant Loyalka & Xiaoting Huang & Linxiu Zhang & Jianguo Wei & Hongmei Yi & Yingquan Song & Yaojiang Shi & James Chu, 2016. "The Impact of Vocational Schooling on Human Capital Development in Developing Countries: Evidence from China," The World Bank Economic Review, World Bank, vol. 30(1), pages 143-170.
    7. Padang Wicaksono & Lionel Priyadi, 2018. "Does Manufacturing Sophistication Lead to Higher Demand for Vocational Workers? Evidence from Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 64, pages 59-72, Juni.
    8. World Bank, 2014. "Indonesia : Avoiding the Trap," World Bank Publications - Reports 18944, The World Bank Group.
    9. Latif Adam & Siwage Dharma Negara, 2015. "Improving Human Capital through Better Education to Support Indonesia’s Economic Development," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 61, pages 92-106, August.

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    Keywords

    academic achievement; academic attainment; academic content; academic education; academic schools; access to higher education; access to tertiary education; catholic schools; classroom; classroom time;
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