Huzeyfe Torun is an Economist at the CBRT.
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One of the priority areas for reinforcing the education-employment relationship is vocational high school education. It is frequently emphasized by public institutions, universities, non-governmental organizations and the business world that vocational high school education should be expanded and its quality should be enhanced to train individuals that have received a hands-on basic training about their occupations and who have the capacity to adapt to technological advances. Similarly, the importance of vocational high school education is also stated in development plans, medium-term plans and strategic plans. This interest and importance is fueled by the conviction that vocational high school education contributes both to the country’s economy and the individuals’ careers. From a general economic perspective, one of the preconditions for transition to high value-added production in all sectors, especially in the manufacturing sector, is having qualified human resources. In particular, in rapidly growing economies like Turkey, vocational high school education plays a pivotal role in the training of qualified human resources. It should also be noted that the vocational high school curriculum must be aligned with the priorities of the labor market and overlap with the strategic goals in the economy.
For individuals, the returns of vocational high school education are particularly important. Every student who has completed middle school and will move on to high school education, is curious about the advantages and disadvantages of vocational high school education with respect to the labor market. Table 1 shows labor market outcomes of individuals aged 15 years and over with respect to their education level. The table reveals that labor force participation ratios of vocational high school graduates are significantly higher than those of general high school graduates and that their unemployment rates are significantly lower. While only 48.5 percent of general high school graduates are employed, 58.9 percent of vocational or technical high school graduates have a job. This difference in favor of vocational high school graduates is also easily observed when male and female individuals are compared separately or when data from previous years are analyzed.
So, based on this table, can we tell a student who has just graduated from middle school and is in search of a high school that he will have 10 percentage points higher chance of getting a job and 2 percentage points lower chance of being unemployed if he chooses to go to a vocational high school? In other words, does the difference in the table reflect a causal link between vocational high school education and labor market outcomes? Or is it a simple correlation?
In this context, the nature of the relationship between vocational high school education and labor market outcomes is vital both for the individual and for the policy maker. For example, the difference seen on the table that is in favor of vocational high school education might stem from the fact that individuals who already have more personal assets and who have higher skills to find a job, choose vocational high schools. Similarly, socio-economic conditions of individuals who choose vocational high schools may force them to find a job as soon as they graduate. Meanwhile, if individuals choosing vocational high school education are from socio-economically disadvantaged groups with less business connections, the difference in the table reflects less than the real advantage of the vocational high school. So, in econometric terms, we might be facing an endogeneity problem here.
In our study, we implement an Instrumental variables strategy to overcome the endogeneity problem mentioned above and analyze the causal relationship between vocational high school education and employment likelihood [Torun and Tumen, 2016]. As an instrumental variable, we use the number of vocational high schools opened in each district between 1978 and 1987 in Turkey. A similar method has been previously used by Card (1993), Kane and Rouse (1995) and Duflo (2001). Throughout the analyzed decade, the number of districts with at least one vocational high school in Turkey has increased by approximately 30 percent. In our regression analysis, we used a 5 percent sample from the 2000 population census and controlled for the observable variables such as age, province of birth, district population, general education level of the individuals in the district, and number of establishments in the district. We observe that the probability of receiving a vocational high school degree is higher among individuals if their district of birth had a vocational high school before these individuals reached high school age. This finding suggests that the accessibility of vocational high schools is a critical factor in the proliferation of vocational high school education.
At the second stage, we investigated how vocational high school education influences the labor market outcomes by using the instrumental variable method. In Ordinary Least Squares analysis, we find that vocational high school education is correlated with a 2-4 percentage points higher likelihood of employment among men aged 26-35. This finding is in line with the descriptive statistics seen in Table 1. However, in Instrumental Variables regression analysis, we find positive but statistically insignificant results. Relying on the evidence of this study, we cannot come to the conclusion that the relationship between vocational high school education and employment likelihood is a causal one. The fact that vocational high school graduates are more likely to find a job due to their socioeconomic conditions, or that individuals with better personal skills and job search abilities go to vocational high schools may explain the fact that causal link is an insignificant one despite a large and positive correlation.
Although the causality is questionable, it is a fact that among non-university graduates, individuals with a vocational high school degree have higher employment probability compared to those with a general high school degree in Turkey. Based on the analysis in this study, two policy proposals can be made. Firstly, as demonstrated in the analysis regarding vocational high school openings between 1978 and 1987, accessibility plays a crucial role in promoting vocational high school education. Secondly, although among non-university graduates, vocational high school graduates have higher employment probability, we cannot argue that this relation is a causal one. Nevertheless, it is not possible to make inferences about the quality of employment, wages and social rights due to the data constraints of the current study.
Card, D. E. (1993). “Using Geographic Variation in College Proximity to Estimate the Return to Schooling." NBER Working Paper #4483.
Duflo, E. (2001). “Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment." American Economic Review, 91, 795-813.
Kane, T. J. and C. E. Rouse (1995). “Labor Market Returns to Two- and Four-Year College." American Economic Review, 85, 600-614.
Torun, H. and S. Tümen (2016). “Do vocational high school graduates have better employment outcomes than general high school graduates? Evidence from Turkey,” Central Bank of the Republic of Turkey, unpublished manuscript.