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Area of Study and Earnings – Engineering, construction and business and law have a strong impact but not arts and media

In this paper, we investigate the relationship between labour market outcomes and vocational qualifications disaggregated by subject area of study. Using individuals holding vocational qualifications in any subject at the level below as their highest level of achievement in the Regulated Qualifications Framework (RQF) as the counterfactual group, we find that gaining vocational qualifications in most subject areas are associated with positive earnings differentials across all qualification aims, for both men and women. For qualifications in ‘Engineering’, ‘Construction’ and ‘Business and Law’, the magnitude of the association is particularly strong, especially for women. In contrast, qualifications in ‘Arts and Media’ are frequently associated with negative earnings differentials for men across all qualification aims.

In this paper we expand on our previous analysis of vocational qualification achievement and labour market outcomes using the Longitudinal Education Outcomes data (London Economics (2017)1) by looking in detail at the results disaggregated by subject area of study. We also estimate subject-specific differentials for each qualification aim (Apprenticeships, NVQs, BTECs, and other full and non-full vocational qualifications).
The findings of the analysis suggest that labour market outcomes (in terms of daily earnings, proportion of the year in employment and benefit dependency) vary considerably across different subject areas, and for different aim types and levels within the Regulated Qualification Framework (RQF). However, the earnings differentials accruing to individuals in possession of vocational qualifications in ‘Engineering’, ‘Construction’ and ‘Business and Law’ subject areas are typically very strong. This is found to be consistent across almost all qualification aims irrespective of RQF level. In contrast, qualifications in ‘Arts and Media’ are frequently associated with negative earnings differentials for men across all qualification aims.
Although using the group of ‘all individuals holding qualifications at the level below’ as the counterfactual allows us to look at variation in labour market outcomes across qualifications in different subject areas using a common counterfactual, there is a strong underlying heterogeneity in both qualification and individual characteristics that we are unable to capture. In fact, it should be noted that some qualification types are only offered (or predominantly offered) in specific subject areas; admissions criteria typically condition on prior qualifications held (including subject area of prior qualifications); and individuals are not all equally likely to choose different qualification types and subject areas, but rather self- select into specific aims depending on their characteristics, preferences, and aspirations etc.
In separate discussion papers we will explore this heterogeneity and look at the earnings differentials associated with progression in specific subject areas (e.g. moving from a Level 2 qualification in ‘Engineering’ to a Level 3 qualification in ‘Engineering’), as well as earnings differentials conditioning on prior achievement and socio-economic characteristics.
Findings
In terms of the results of the analysis:
 Vocational qualifications in most subject areas are associated with positive earnings differentials across all qualification aims, for both men and women.
 For qualifications in ‘Engineering’, ‘Construction’ and ‘Business and Law’, the magnitude of the effect is particularly strong, especially for women.
 In contrast, qualifications in ‘Arts and Media’ are frequently associated with negative earnings differentials for men across all qualification aims.

Chosen excerpts by Job Market Monitor. Read the whole story at Labour market outcomes disaggregated by subject area using the Longitudinal Education Outcomes (LEO) data

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