Skills for the Future? A Lifecycle Perspective on Systems of Vocational Education and Training

This paper asks how the institutional design of vocational education and training (VET) affects worker adaptability to changing skill demands over the lifecycle. We compare two types of VET systems. Collectivist systems have high employer involvement and focus on specific skills, whereas Statist systems have lower employer involvement and focus more on general skills. Based on prior research demonstrating the importance of general skills in learning new skills, we hypothesize that worker adaptability will be higher in Statist VET systems than Collectivist VET systems. Using a triple-difference model on data from the Program for the International Assessment for Adult Competencies, we find that as age increases, there is a significantly steeper decline in worker adaptability measures within Collectivist systems compared to Statist systems. Our results provide an explanation behind the diminishing employment returns on employer-dominated VET over the lifecycle found in prior studies