Urban/rural disparities in the wage effect of additional vocational education after formal education: the case of the Philippines

ABSTRACT The aim of this study is to investigate and compare rural and urban returns to additional vocational education after completing formal education in the Philippines. We estimate the returns to additional vocational education after formal education in formal employment and also rural/urban disparities for each industry sector. The investigation of the wage effect is based on the Mincerian Earnings Function, initially using OLS estimations and then correcting for sample selection bias using the Heckman method. Preliminary findings confirm that the wage effect is associated with additional vocational education for those completing secondary education, and the effect is more pronounced in rural than in urban areas. Thus, our principal finding is that vocational education is potentially more useful in rural areas, especially for those completing secondary education in the Philippines and especially considering that only about 6% of the workforce has completed any vocational education.