Scandinavian Working Papers in Economics

Working Paper Series,
Royal Institute of Technology, Department of Real Estate and Construction Management & Centre for Banking and Finance (cefin)

No 13/4: The impact of vocational education and training on income in Sweden

Roland Andersson , Pardis Nabavi Larijani and Mats Wilhelmsson ()
Additional contact information
Roland Andersson: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Department of Real Estate and Construction Management , Royal Institute of Technology, Brinellvägen 1, 100 44 Stockholm, Sweden
Pardis Nabavi Larijani: Division of Economics, Royal Institute of Technology, Postal: Drottning Kristinas väg 30, 100 44 Stockholm, Sweden
Mats Wilhelmsson: Centre for Banking and Finance - CEFIN - Royal Institute of Technology, Postal: Centrum för bank och finans, KTH, Drottning Kristinas väg 30, SE-100 44 Stockholm, Sweden

Abstract: The aim of this article is to investigate the impact of advanced vocational education and training (AVET) on earnings. We use a multiple longitudinal panel data set for the period 1996 to 2008. Moreover, we have a panel for eight different labour markets in Sweden. By estimating an income equation, we test, while controlling for selection bias, the impact, if any, of AVET on earnings. Ordinary least squares (OLS) estimates are compared with instrumental variable (IV) and Hausman–Taylor estimates, together with fixed effect estimates. We also restrict the sample to those individuals with a higher probability of attending vocational education and training. The results are rather robust and indicate that earnings are higher for individuals who have undertaken a vocational training programme. We use quantile regression techniques to estimate not only the mean return to vocational training effects but also distributional effects.

Keywords: Vocational training; Instrument variables; Hausman-Taylor; quantile regression

JEL-codes: I21; J01; J31

37 pages, March 21, 2013

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