A Comparison of Earnings Related to Higher Level Vocational/Technical and Academic Education

We use the earliest cohort of English secondary school leavers with newly available Longitudinal Education Outcomes data (622,000 pupils in 2002/03) to compare earnings of people with higher vocational/technical qualifications to those of degree holders. The unusually rich data allow us to estimate earnings differentials until the age of 30, controlling for a wide array of characteristics and full education trajectories.

Our results show that initially higher earnings observed for people achieving higher vocational education disappear when people are in the mid-twenties. Depending on the type of university attended, male degree holders earn up to 18% more by age 30, while female graduates earn around 40% more. However, there is considerable heterogeneity by gender and subject area. There are high returns related to higher vocational/technical education in STEM subjects, which remain significantly above those of many degree holders by age 30.