Fluctuations in the wage gap between vocational and general secondary education: lessons from Portugal

Pedro Miguel Raposo; Joop Hartog; Hugo Reis

doi:10.1007/s00148-021-00846-1

Fluctuations in the wage gap between vocational and general secondary education: lessons from Portugal

Pedro Miguel Raposo, Joop Hartog, Hugo Reis

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Abstract

We document and analyse the wage gap between vocational and general secondary education in Portugal between 1994 and 2013. As Portuguese workers have been educated in different school systems, we have to distinguish between birth cohorts. Analysing the wage gaps within cohorts, we find no support for either the human capital prediction of crossing wage profiles or the hypothesis that general graduates increasingly outperform vocational graduates in late career. We discover that the life- cycle wage profiles have shifted over time. We link the pattern of shifting cohort profiles to changes in the school system and in the structure of labour demand. We conclude that assessing the relative value of vocational education requires assessing how the vocational curriculum responds to changes in economic structure and technology. We show that the decline in assortative matching between workers and firms has benefited vocationally educated workers.

Original language	English
Pages (from-to)	643-675
Number of pages	33
Journal	Journal of Population Economics
Volume	35
Issue number	2
DOIs	https://doi.org/10.1007/s00148-021-00846-1
Publication status	Published - Apr 2022

Keywords

Human capital
Returns to education
Vocational wage gap
Worker-firm allocation

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1007/s00148-021-00846-1Licence: CC BY

30957512Final published version, 1.63 MBLicence: CC BY

http://hdl.handle.net/10400.14/36567Licence: CC BY

Cite this

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title = "Fluctuations in the wage gap between vocational and general secondary education: lessons from Portugal",

abstract = "We document and analyse the wage gap between vocational and general secondary education in Portugal between 1994 and 2013. As Portuguese workers have been educated in different school systems, we have to distinguish between birth cohorts. Analysing the wage gaps within cohorts, we find no support for either the human capital prediction of crossing wage profiles or the hypothesis that general graduates increasingly outperform vocational graduates in late career. We discover that the life- cycle wage profiles have shifted over time. We link the pattern of shifting cohort profiles to changes in the school system and in the structure of labour demand. We conclude that assessing the relative value of vocational education requires assessing how the vocational curriculum responds to changes in economic structure and technology. We show that the decline in assortative matching between workers and firms has benefited vocationally educated workers.",

keywords = "Human capital, Returns to education, Vocational wage gap, Worker-firm allocation",

author = "Raposo, {Pedro Miguel} and Joop Hartog and Hugo Reis",

note = "Funding Information: We are grateful for the comments from five anonymous referees and the editor, Klaus F. Zimmermann, which have led to substantial improvements of the paper. We are also grateful for helpful comments and suggestions from Isabel Horta Correia, Lu{\'i}sa Canto e Castro Loura, Pedro Portugal, Pedro Telhado Pereira and Jorge Correia da Cunha. We have also benefited from comments made by participants at the IZA/SOLE Transatlantic Meeting of Labor Economists, EALE conference, China meeting of the Econometric Society, CVER conference, Portuguese Ministry of Education workshop and Bank of Portugal seminar. We are grateful to the Portuguese Ministry of Employment for access to the data and thank Lucena Vieira for outstanding data and computational assistance. The data used in this paper (Quadros de Pessoal—QP) builds on anonymised micro datasets that can be obtained by filling an accreditation form according to the protocol established by Statistics Portugal (INE). Request for getting access can be emailed to: [email protected]. The authors are willing to assist in this process (Pedro Raposo; [email protected]). The data request forms are available in the website of INE. The usual disclaimer applies. An old working paper version of the article circulated under the title “Vocational high school graduate wage gap: the role of cognitive skills and firms”. Funding Information: Joop Hartog would like to acknowledge the financial support of the Spanish Ministry of Education (grant number ECO2010-20829). Publisher Copyright: {\textcopyright} 2021, The Author(s).",

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AU - Raposo, Pedro Miguel

AU - Hartog, Joop

AU - Reis, Hugo

N1 - Funding Information: We are grateful for the comments from five anonymous referees and the editor, Klaus F. Zimmermann, which have led to substantial improvements of the paper. We are also grateful for helpful comments and suggestions from Isabel Horta Correia, Luísa Canto e Castro Loura, Pedro Portugal, Pedro Telhado Pereira and Jorge Correia da Cunha. We have also benefited from comments made by participants at the IZA/SOLE Transatlantic Meeting of Labor Economists, EALE conference, China meeting of the Econometric Society, CVER conference, Portuguese Ministry of Education workshop and Bank of Portugal seminar. We are grateful to the Portuguese Ministry of Employment for access to the data and thank Lucena Vieira for outstanding data and computational assistance. The data used in this paper (Quadros de Pessoal—QP) builds on anonymised micro datasets that can be obtained by filling an accreditation form according to the protocol established by Statistics Portugal (INE). Request for getting access can be emailed to: [email protected]. The authors are willing to assist in this process (Pedro Raposo; [email protected]). The data request forms are available in the website of INE. The usual disclaimer applies. An old working paper version of the article circulated under the title “Vocational high school graduate wage gap: the role of cognitive skills and firms”. Funding Information: Joop Hartog would like to acknowledge the financial support of the Spanish Ministry of Education (grant number ECO2010-20829). Publisher Copyright: © 2021, The Author(s).

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N2 - We document and analyse the wage gap between vocational and general secondary education in Portugal between 1994 and 2013. As Portuguese workers have been educated in different school systems, we have to distinguish between birth cohorts. Analysing the wage gaps within cohorts, we find no support for either the human capital prediction of crossing wage profiles or the hypothesis that general graduates increasingly outperform vocational graduates in late career. We discover that the life- cycle wage profiles have shifted over time. We link the pattern of shifting cohort profiles to changes in the school system and in the structure of labour demand. We conclude that assessing the relative value of vocational education requires assessing how the vocational curriculum responds to changes in economic structure and technology. We show that the decline in assortative matching between workers and firms has benefited vocationally educated workers.

AB - We document and analyse the wage gap between vocational and general secondary education in Portugal between 1994 and 2013. As Portuguese workers have been educated in different school systems, we have to distinguish between birth cohorts. Analysing the wage gaps within cohorts, we find no support for either the human capital prediction of crossing wage profiles or the hypothesis that general graduates increasingly outperform vocational graduates in late career. We discover that the life- cycle wage profiles have shifted over time. We link the pattern of shifting cohort profiles to changes in the school system and in the structure of labour demand. We conclude that assessing the relative value of vocational education requires assessing how the vocational curriculum responds to changes in economic structure and technology. We show that the decline in assortative matching between workers and firms has benefited vocationally educated workers.

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M3 - Article

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VL - 35

SP - 643

EP - 675

JO - Journal of Population Economics

JF - Journal of Population Economics

IS - 2

ER -

Fluctuations in the wage gap between vocational and general secondary education: lessons from Portugal

Abstract

Keywords

UN SDGs

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CUBE: Católica Lisbon Research Unit in Business and Economics

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Fluctuations in the wage gap between vocational and general secondary education: lessons from Portugal

Abstract

Keywords

UN SDGs

Access to Document

Other files and links

Fingerprint

Projects

CUBE: Católica Lisbon Research Unit in Business and Economics

Cite this