Document Abstract

Wages and employment: the role of occupational skills (IZA DP no 11586)

Looks at how occupational skills acquired in vocational education and training (VET) affect wages and employment or labour market outcomes. Provides information on VET in Switzerland, discusses the data sources (data on skills taught in VET from the career-counselling centre Berufsinformationszentrum and the Social Protection and Labour Market survey for labour market outcomes) and presents descriptive evidence on interpersonal, cognitive and manual skills and labour market outcomes of VET workers in Switzerland. Develops a simple model of search and matching in the labour market with a multidimensional skill vector. Studies wages and employment outcomes of VET workers. Outlines the structural estimation procedure, using the Method of Simulated Moments and presents the estimation results. Finds that: firms value cognitive skills on average almost twice as much as interpersonal and manual skills, and they prize complementarity in cognitive and interpersonal skills; the average return to VET skills in hourly wages is 9%, similar to the returns to schooling; and VET appears to improve labour market opportunities through higher job arrival rate and lower job destruction. Concludes that workers benefit from acquiring a VET degree.


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Girsberger, Esther Mirjam; Rinawi, Miriam; Krapf, Matthias
Ref No:
Institute for the Study of Labor (IZA)

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