Skills for the Future? A Life Cycle Perspective on Systems of Vocational Education and Training

In this article, the authors ask how the institutional design of vocational education and training (VET) affects worker adaptability to changing skill demands over the life cycle. They compare two types of VET systems. Collectivist systems have high employer involvement and focus on specific skills, whereas Statist systems have lower employer involvement and focus more on general skills. Based on prior research demonstrating the importance of general skills in learning new skills, the authors hypothesize that worker adaptability will be higher in Statist VET systems than in Collectivist VET systems. Using a triple-difference model on data from the Program for the International Assessment of Adult Competencies, they find that as age increases, a significantly steeper decline in worker adaptability occurs within Collectivist systems compared to Statist systems. Results provide an explanation behind the diminishing employment returns to employer-dominated VET systems found in prior studies.