Vocational education and training - VET

This paper exploits a rich dataset from various administrative sources to study short- and medium-term labor market outcomes of vocational education and training graduates in Saudi Arabia. It examines five cohorts of graduates from institutes operated by the Technical and Vocational Training Corporation who are formally employed in the private sector. The outcome measures for the study are based on monthly earnings data from the private sector social insurance records covering up to five years after graduation for the first cohort. The analysis finds positive returns to technical and vocational education are sustained over time. However, program orientation and economic conditions at the time of graduation appears to impact wages. Furthermore, vocational education and training in Saudi Arabia is associated with higher job mobility after graduation from the program. Students’ mobility premium is enhanced by completion of the program, suggesting improved skills signaling and utilization contributing to higher returns to vocational education and training. The analysis identifies several challenges and opportunities to further improve outcomes of graduates, such as reducing the gender gap in labor market outcomes of female graduates and reducing the high incidence of vertical mismatch among graduates’ field-of-study selection and the occupations group in which they are employed.

This paper exploits a rich dataset from various administrative sources to study short- and medium-term labor market outcomes of vocational education and training graduates in Saudi Arabia. It examines five cohorts of graduates from institutes operated by the Technical and Vocational Training Corporation who are formally employed in the private sector. The outcome measures for the study are based on monthly earnings data from the private sector social insurance records covering up to five years after graduation for the first cohort. The analysis finds positive returns to technical and vocational education are sustained over time. However, program orientation and economic conditions at the time of graduation appears to impact wages. Furthermore, vocational education and training in Saudi Arabia is associated with higher job mobility after graduation from the program. Students’ mobility premium is enhanced by completion of the program, suggesting improved skills signaling and utilization contributing to higher returns to vocational education and training. The analysis identifies several challenges and opportunities to further improve outcomes of graduates, such as reducing the gender gap in labor market outcomes of female graduates and reducing the high incidence of vertical mismatch among graduates’ field-of-study selection and the occupations group in which they are employed.