What's up with the vocational education? Dissecting the education-job mismatch in school to work transitions in Croatia Evidence based policy making for employment generation and skills provision New Skills for New Jobs in the Western Balkans? Teo Matković, University of Zagreb

Education-occupation mismatch? Mismatch between educational system and "labour market needs". One way of understanding it: a "mechanical" issue of supply and demand? Assumption: non-problematic link Education --> Occupation But: Weak demand for some occupations or "overproduction" of some cadres leading to problems with employability Flipside: Weak supply of profiles in demand is hurting the economy. If this holds true: Adjustment of entry quotas would solve skill mismatch and reduce unemployment

Strategy: to establish What is the sectoral structure of labour market entrants? What is the structure of occupational destinations for vocational education graduates? Is it due to mismatch of aggregated supply and demand? What about the employability? Does job acquisition dynamics vary across fields of education? Is there a noted structural trend of change in employability for ? What had the crisis brought us? Digresion 1: Things in the context: Differences between fields vs. differences between levels of education Digression 2: Evidence on facilitating employability through training ALMPs

Observing the post-educationoutcomes: Analytical approach and sources A: Population: all persons who completed vocational education in the period B: Entered higher education Number continuing education Destinations: type and field of higher education C: Registered with PES Dynamics: employed within 6/12/36 months Destinations: occupation (ISCO) of first job Education database (E-matica) – aggreg. CBS education statistics PES database Reliable knowledge on current (and past) outcomes among people leaving education – as a base for policy development and (one of key inputs) for future planning.

The data used here A product of IPA project "Strengthening of the institutional framework for development of VET occupational standards, qualifications and curricula" (Jačanje institucionalnog okvira za razvoj strukovnih standarda zanimanja, kvalifikacija i kurikuluma) Entire population of new registrants 2006-2010 Detailed field of education, date of job aquisition, administrative ISCO and ISIC codes of the job. Focus on secondary educated recent school leavers with no substantive previous experience (age <21). Bias: only those who reported to PES (67% for vocational graduates over entire time span – much higher as reccesion struck)

On outcomes presented here Horizontal mismatch Education-occupation mismatch: have graduates ended in the occupations they were trained for Job analysis approach (taking intended match of education and occupation at a face value) - expert estimate of sectoral council experts. Relaxed criterion applied – if any occupation deemed suitable for broad educational sector is reached by a graduate from any course within the eductional sector, the outcome is considered a match (e.g. if a trained cook gets a waiter job) – likely underestimating incidence of mismatches Job acquisition dynamics Ability to find (any) job within 6/12/36 months Ought to be lower among the graduates from "sufficitary" education programmes where demand for associated occupations is weaker.

Structure of vocational education origins (1) Share of registrants with sectoral education (A) Agriculture and food processing 6,3 Forestry and carpentry 1,8 Textile and leather 2,7 Engineering, shipbuilding, metal 16,3 Electrotechnics and IT 12,7 Construction and geodesy 3,9 Economics, trade and business administration 19,9 Tourism and hospitality 11,9 Transport and logistics Health 7,0 Personal and other services 8,6

...and occupational destinations (for same pop.) (2) Share of registrants with sectoral education (A) Found first job in sectoral occupation (B) Agriculture and food processing 6,3 4,7 Forestry and carpentry 1,8 4,2 Textile and leather 2,7 3,0 Engineering, shipbuilding, metal 16,3 9,7 Electrotechnics and IT 12,7 5,0 Construction and geodesy 3,9 6,6 Economics, trade and business administration 19,9 23,0 Tourism and hospitality 11,9 20,4 Transport and logistics 6,5 Health 7,0 Personal and other services 8,6 9,5

...compositional mismatch for youth? (3) Share of registrants with sectoral education (A) Found first job in sectoral occupation (B) Registrants from sectoral education vs. jobs found in sectoral occupation (C=A/B) Agriculture and food processing 6,3 4,7 136% Forestry and carpentry 1,8 4,2 44% Textile and leather 2,7 3,0 91% Engineering, shipbuilding, metal 16,3 9,7 167% Electrotechnics and IT 12,7 5,0 253% Construction and geodesy 3,9 6,6 59% Economics, trade and business administration 19,9 23,0 86% Tourism and hospitality 11,9 20,4 58% Transport and logistics 6,5 97% Health 7,0 108% Personal and other services 8,6 9,5

How often sectoral occupations get filled from "appropriate" education Share of registrants with sectoral education (A) Found first job in sectoral occupation (B) Registrants from sectoral education vs. jobs found in sectoral occupation (C=A/B) Jobs in sectoral occupations filled by registrants with sectoral education Agriculture and food processing 6,3 4,7 136% 37,0% Forestry and carpentry 1,8 4,2 44% 25,0% Textile and leather 2,7 3,0 91% 33,4% Engineering, shipbuilding, metal 16,3 9,7 167% 74,4% Electrotechnics and IT 12,7 5,0 253% 78,3% Construction and geodesy 3,9 6,6 59% 29,1% Economics, trade and business administration 19,9 23,0 86% 50,5% Tourism and hospitality 11,9 20,4 58% 45,1% Transport and logistics 6,5 97% 28,9% Health 7,0 108% 96,9% Personal and other services 8,6 9,5 40,7%

Found a job within 12 months Differences in general employability? (graduates from short vocational courses) Number of registrants (2006-2010) Found a job within 12 months Occupation not matching sectoral profile Tourism and hospitality 6466 56% 27% Construction and geodesy 1446 55% 53% Forestry and wood processing 1109 54% 43% Engineering, shipbuilding, metallurgy 8912 52% 57% Electrotechnics and IT 3934 51% 68% Economics, trade and business administration 5479 41% Transport and logistics 1453 50% Agriculture and food processing 1941 49% 63% Personal and other services 4906 Textile and leather 1246 65% Total – short vocational programmes (3 yr, mostly apprenticeship-based) 37345

Crisis and employability by sector of vocational secondary education: not much of a difference

Differences within educational sectors Differences within educational sectors? Dynamics of job acquisition: The most populous vocational programmes in electrotechnics

In-detail: Occupation of the first job found: electro-technician

What about level of education?

Possibility of a quick-fix: efficiency of training ALMPs estimation via matching technique (Matković et. al, 2011) Sudionici mjera iz 2009. evidentirani kao nezaposleni u 10. mj. 2011: Financiranje obrazovanja 44% Kod njima sličnih nesudionika 46%(ns) But slight (2-6%) positive effect for younger unemployed, persons without upper secondary education and returnees from inactivity ...just like in the West, might help some (at considerable price), but not a magic wand.

Findings: wrapping up (1) Many horizontal mismatches, lasting ones Wasted (personal and public) investment? Some sectors in "short supply" (wood, tourism, construction) Majority of graduates find jobs in apropriate occupations, often slightly faster than others (but: health) In some sectors occupational demand exceeds supply (engineering, electrotechnics) But recruitment to sectoral occupations mostly happens from sectoral education Maintaining the capacity or reducing educational sectors? Good signal? Average or above-average employability Some educational sectors seldom leads to sectoral occupation although there is no lack of demand for sectoral occupations Content of education not recognized as relevant with employers? As well, slightly lower employability.

Findings: wrapping up (2) Employability variation between and within education sectors rather modest Vocational education composition unlikely to be a key for understanding persistenly slow labour market integration of youth Level of education as key determinant of LM outcomes Tradeoff at the personal level: educational trajectory choice (few viable "bridging" options between tracks) Limited remedial capability of active labour market policies

An issue of credibility and quality of education, not quantity Development of ocupational and qualification standards Source: Balković et. al, 2011

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Further strivings/extension: Human potential register Source: Crnković-Pozaić, 2012

Observing the outcomes: Analytical approach and sources A: Population: all persons who completed vocational education in the period B: Entered higher education Number continuing education Destinations: type and field of higher education C: Registered with PES Dynamics: employed within 6/12/36 months Destinations: occupation (ISCO) of first job Education database (E-matica) – aggreg. CBS education statistics PES database Directly linkable: Individual level data (anonymized) More precise: State matriculation (Državna matura) +ISVU databases Complete coverage: Pension insurance Base (HZMO)

Some leads... Limited function of vocational quota allotment Having in mind not only credentials, but credible vocational competences – transparency of competences Growing body of evidence on employer skill needs (but how will they be provided/implemented?) Employee perspective? (skills survey) Necessary involvement and coordination with employers: building functional linkages – with respect to training and content, leading to credible outcomes Tradeoff: vocational skills and workplace training (facilitating insertion) vs. general competences (key for tertiary education and lifelong learning)