The Value of Vocation

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Vocational skills training offers multiple economic benefits and is gaining recognition as a viable alternative to college education.
Author: MARIA PETRAKIS. Publication: F&D Magazine. Date: March 2025.
Vocational training can provide practical work experience and certification that serves as “a credible skills signal” to employers.

J-PAL review: 28 studies on vocational and skills training programs across countries including Argentina, Bangladesh, Türkiye, and the US.
Uganda study:
- Free six-month vocational training produced income gains larger and more sustained over time than a wage subsidy of $50 a month for six-month on-the-job apprenticeships.
- In a COVID follow-up, vocational trainees were more likely to lose jobs at the pandemic onset but recovered and ultimately earned more over the course of the pandemic than peers not offered training.
Project QUEST (US, health care sector):
- Average annual earnings of participants was 26 percent higher six years later and 15 percent higher eleven years later compared with nonparticipants.
J-PAL and researchers emphasize randomized controlled trials as the methodology informing vocational training research.

August 2023 report (World Bank, ILO, UNESCO): technical and vocational education and training in low- and middle-income countries do not match labor-market needs and are unprepared for a large rise in future demand for these skills.
Projected student growth in secondary technical and vocational education:
- Burundi, Mali, and Uganda: expected to more than quadruple over the next two decades.
- Niger: expected to rise tenfold.
Labor-market mismatch: many college graduates are prepared for jobs that are not the ones hiring; vocational programs do not always bridge this gap unless well targeted to in-demand sectors.

Credible, industry-recognized certification or diploma.
Integration of practical work experience and soft skills training.
Strong connections to employers and sectoral targeting.
Targeted sectoral employment programs for people with low incomes or nontraditional backgrounds shown to produce substantial and persistent earnings increases.

Cost per person for vocational training programs varies widely: from a few hundred dollars to more than $10,000 per person trained.
Low- and middle-income countries spend less than 0.2 percent of GDP on vocational training—less than half what high-income countries spend.
World Bank/ILO/UNESCO report suggests tapping private financing to scale programs.

Vocational training is particularly relevant where university degrees are out of reach or not well aligned with employer needs.
Growing middle class and economic growth in Africa and Asia increase attractiveness for vocational providers and private investors.
Example: Pitman Training (now owned by LaunchLife International) is seeking expansion in Africa with partners in Nigeria, Zimbabwe, Kenya, and Ghana, offering courses from secretarial skills to software and web development.

High-profile entrepreneurs (examples cited) illustrate successful nontraditional educational paths.
Pew Research Center finding: Just 22 percent of Americans said that college is worth the money; almost half said the cost is worth it only if a student doesn’t have to take out loans; 29 percent said the cost is not worth it at all.
Student debt relief and loan policy actions:
- US: almost $180 billion in student debt relief ahead of the November 2024 election, helping 4.9 million borrowers.
- Australia: $A 16 billion (about US$10 billion) debt cut for 3 million students and capped indexation on education loans after a 7.1 percent payment increase due to high inflation.

Design vocational training programs carefully to include features shown to be most promising and appropriate to context.
Target programs toward in-demand sectors to better bridge labor-market mismatches.
Provide industry-recognized certifications, integrate soft skills, and build strong employer linkages.
Consider leveraging private finance to supplement public spending, especially in low- and middle-income countries where public spending is under 0.2 percent of GDP.
Monitor and evaluate programs using rigorous methods (for example, randomized controlled trials) to identify what works and to scale effective models.

MARIA PETRAKIS, F&D Magazine, March 2025