Finding the Right Track: Payoffs to Vocational Education Programs with Workplace Learning

Abstract

Workplace learning in vocational education and training (VET) is often claimed to be an important metric to define ‘high quality’ programs, but outcomes beyond initial employment are not well understood. In this study, we estimate outcomes of upper-secondary school VET programs with different levels of workplace learning in Australia — solely classroom-based, classroom-based with a workplace learning component and training with an employment contract (apprenticeship/traineeships). Outcomes of students in each of these vocational programs are compared to outcomes of student who do not enrol up to seven years later. We use data from 2003, 2006 and 2009 PISA participants who are tracked through an annual survey, adjusting for differences in student test scores, socio-economic characteristics, post-secondary aspirations and school and peer characteristics. Our results suggest short-term labour market benefits that disappear by year seven out from school. However, among those who go onto further study after school, VET with workplace learning is associated with positive outcomes up to year seven. These include 5-10 ppt. higher rates of full-time employment, 7-10 ppt. higher reported rates of career job attainment and 0.14 standard deviation higher job satisfaction. Suggestive evidence indicates that workplace learning may provide job market information and/or employer contacts that help students find good post-secondary pathways in education and training.