Vocational Education: Lessons for India Nalin Jena World Bank Delhi May 06, 2010

Global trends related to skills Wage differentials are rising between skilled and unskilled workers in many regions, driven by skill- biased technological change Skilled jobs are growing faster than unskilled employment Knowledge-based industries are expanding rapidly and with them the demand for skills Unskilled workers are increasingly more vulnerable to job loss, extended unemployment, and declining real wages 2

Countries in Asia place more emphasis on general secondary education than TVE 3

India is part of this trend with more emphasis on general secondary education 4

5 Comparing South and East Asia suggests 20-year lag in human capital stock of education IndiaMalaysia

Despite progress, India’s human capital lags far behind China (pop. aged > 15 years)

Preparing youth in schools for entry to the workforce Payoff to TVE is highest where an economy is creating jobs A little vocational content in secondary education(<20%) doesn’t help with jobs When compared with general secondary education TVE impact on chances for employment is stronger than on wages Post-secondary TVE provides strong impact on wages and employment Working in jobs that use the skills acquired pays higher returns TVE is unlikely to solve all social problems: gender, demand for higher education, unemployment and disadvantage TVE can increase educational attainment even where it does not increase employment and earnings 7

Key areas of global reform in skills development Government strengthening of market institutions Registration and accreditation Testing and certification National qualification frameworks Labor market information Regulation Carrying out school-based reforms Strengthening links between schools and industry Curricula reform Strengthening school management Improving facilities and equipment Upgrading of instructors Developing public-private partnerships Promoting lifelong learning with flexible entry and exit from training Focusing on skills outcomes rather than inputs in measuring results 8

Lessons from around the Globe TVE provides short-term gains in employment over general secondary education Apprenticeships provide similar benefits The share of vocational enrolment offers no guarantee to smooth the transition from school to work, but it does expand choice and promote retention TVET reforms are taking place at two levels: School-based reforms Market-based reforms Governments play key role in promoting effective markets for skills development 9

Thank You!

Good international practices Australia and South Korea: building a learning culture to guide TVET policy Singapore: providing students with choices in curricula, plus vertical and horizontal mobility; excellent use of public-private partnerships Chile: using the role of government as a financier to promote competition (INSE) Mexico: good example of pre-employment training and excellent use of monitoring and evaluation for learning (PROBECAT) Germany: dual training linking school and work U.K., Australia, South Africa: expanding apprenticeships to new trades linking school and work Malaysia and Singapore: use of training funds to promote training that reaches small enterprises 11