Vocational Education, Manufacturing, and Income Distribution: International Evidence and Case Studies

33 Pages Posted: 23 Oct 2017

See all articles by Joshua Aizenman

Joshua Aizenman

University of Southern California - Department of Economics; National Bureau of Economic Research (NBER)

Yothin Jinjarak

Victoria University of Wellington - School of Economics & Finance

Nam Ngo

Victoria University of Wellington - School of Economics and Finance

Ilan Noy

Victoria University of Wellington

Date Written: October 2017

Abstract

Economic integration has brought about not only benefits and opportunities but also required adjustment, especially for the youth entering the labour force. The lower growth rates characterizing the post Global Financial Crisis era and the concerns about income inequality put to the fore the degree that better targeted investment in human capital may ameliorate the challenges facing the working poor. Using cross-country data, we find the association between the income shares of the working poor, dependence on manufacturing sector, and the availability of vocational education. Conditioning on tertiary educational attainment, improved access to better vocational education will probably contribute more than large increase in regular college attainment. Comparing the US to Germany suggests that pushing more students to BA granting colleges may no longer be the most efficient way to deal with the challenges caused by the decline in manufacturing employment affecting in particular lower-income households. We also note that a tracking of technical training and educational budget, shown in the case of Vietnam in comparison to Thailand, as well as government subsidies for reskilling of labour fource throughout their career in Singapore, is a potential explanation for their relative manufacturing competitiveness.

Suggested Citation

Aizenman, Joshua and Jinjarak, Yothin and Ngo, Nam and Noy, Ilan, Vocational Education, Manufacturing, and Income Distribution: International Evidence and Case Studies (October 2017). NBER Working Paper No. w23950. Available at SSRN: https://ssrn.com/abstract=3057181

Joshua Aizenman (Contact Author)

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yothin Jinjarak

Victoria University of Wellington - School of Economics & Finance ( email )

P.O. Box 600
Wellington 6001
New Zealand

Nam Ngo

Victoria University of Wellington - School of Economics and Finance ( email )

PO Box 600
Wellington, 6140
New Zealand

Ilan Noy

Victoria University of Wellington ( email )

P.O. Box 600
Wellington, 6140
New Zealand

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