Work or Schooling? On the Return to Gaining In‐School Work Experiences
| DOI | http://doi.org/10.1111/bjir.12166 |
| Author | Sofie J. Cabus,Carla Haelermans |
| Date | 01 March 2017 |
| Published date | 01 March 2017 |
British Journal of Industrial Relations doi: 10.1111/bjir.12166
55:1 March 2017 0007–1080 pp. 34–57
Work or Schooling? On the Return to
Gaining In-School Work Experiences
Sofie J. Cabus and Carla Haelermans
Abstract
Wagesare a composite measure of the return to education and the return to work
experiences. Work experiences are oftendefined as workerswho gain experiences
on-the-job. However, work experiences can also be part of a study curriculum
in vocational secondary education. We estimate the return to in-school work
experiences by comparing the Heckmanselection model and the Rubin matching
model. First, we show that students with in-school work experiences earn +16%
more in the first yearsof labour than their theoretical peers. Second, we indicate
that both empirical models do not appropriately deal with censored observations
in the presence of an informal market.Including information on a set of censored
observations increases the eect to +22%.
1. Introduction
The literature indicates that students with vocational specialization are
inclined to leave educationat an earlier point in their school career than their
theoretical peers (Ryan 2001; Sta and Mortimer 2008). Vocational youth
leave educationearlier, or even drop-out of school without secondary school-
leaving certificate, for two comprehensive reasons. First, youngsters enrolled
in low end vocational- and pre-vocational education or training (VET1) more
often have problems, such as growing up in disadvantaged neighborhoods;
health issues; juvenile delinquency; wrong study choice; unauthorized school
absenteeism; or bad relationship with peers, at home and at school (De Witte
et al. 2013; Rumberger 2011). Second, studentswith vocational specialization
can also trade-in school for a job, irrespectively of their problems, and do so
at an earlier point in their school career than their theoretical peers due to the
opportunity costs of schooling. This article especially focuses on the latter by
exploring the dierences in wages between school-leaving work-oriented and
theoretical students.Traditional human capital theory defines the opportunity
cost of schooling as the monetary return of paid labour (Becker 1962, 1964;
Sofie J.Cabus and Carla Haelermans are at TIER-Maastricht University.
C
2015 John Wiley& Sons Ltd/London School of Economics. Published by John Wiley & Sons Ltd,
9600 Garsington Road,Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
Work or Schooling? 35
Mincer 1958). Mincer (1958) argues that wages are a composite measure
of the return to education and the return to work experiences. He defines
work experiences as workers who gain job market experiences. However,
work experiences can also be gained by students in VET, for instance, by
work placement, internships or dual tracks. Compared to gaining work
experiences on-the-job, the school institution keeps playing an important
role in educating students. Therefore, we refer to this concept as gaining ‘in-
school work experiences’. The hypothesis is that, if work-oriented students
earn higher wages than theoretical students owing to work experiences, then
work-oriented students have higher opportunity costs of staying in school.
This could then explain why they make the school-to-work transition at an
earlier point in the school career than their theoretical peers. We test this
aforementioned hypothesis by estimating the dierences in wages between
school-leaving work-oriented and theoretical students particularly owing to
in-school work experiences.
The contributions of this article to the previous literature are threefold.
First, there is a lively debate in the literature on the return to gaining work
experiences. Several authors provide evidence on the positive relationship
between students’ work experiences and labour market wages (e.g. Hotz
et al. 1998; Light 2001; Ruhm 1995; Sta and Mortimer 2008). Sta
and Mortimer (2008), for example, show that extensive work experience
at an early point in the school career is less beneficial than a prolonged
educational investment, especially for people from ethnic minorities and low
socioeconomic background. However, almost all these studies define work
experiences as working beyond compulsory school-time. Gaining practical
experiences could also be part of an occupational school curriculum, where
students gain practical experiences during their compulsory school-time as
part of the study load. It is in this respect that literature and research on
the return to in-school work experiences is scarce. One example is provided
by Hanushek et al. (2011). The authors have compared general to vocational
education and the distinct impact on labour marketoutcomes in the long-run.
They use data on several European countries and compare the labour market
outcomes of school-leavingyouth with dierent educational backgrounds and
abilities in a dierence-in-dierences framework. Matching estimation is used
to foster comparability of student populations across countries. Hanushek
et al. (2011) conclude that individuals with a background in vocational
education, in first instance,have better employment outcomes than individuals
with a background in general education. However, in the long-run, this
is completely the opposite. Another recent example is provided by Black
et al. (2012). The authors recently studied the eect of in-school training
programmes in Australia. Similar as in Hanushek et al. (2011), Black et al.
(2012) used propensity score matching estimation techniques for aiming at a
causal evaluation of the programme. They argue that these programmes have
decreased the likelihood of dropping out of school and, moreover, increased
chances of finding work. These results were mainly driven by in-school
training programmes that also included a structured workplace learning
C
2015 John Wiley& Sons Ltd/London School of Economics.
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