Vocational Education in the New EU Member States : Enhancing Labor Market Outcomes and Fiscal Efficiency

This report explores the fiscal aspects of vocational education reform in the context of secondary education as a whole and considers the implications of any changes in the vocational education (VE) system for post-secondary and other modes of skill development. The report begins by describing the inherited system of vocational education in the former socialist countries of Central and Eastern Europe which was based on the assumption that everyone had to be trained for a specific occupation before starting work and that it was the function of vocational schools to provide such training. The report explores the scope for improvements in fiscal efficiency via a number of propositions about VE in the EU8 countries today: a) It would not be possible or advisable to fund adequately a traditional VE system which would provide ready-to-work recruits with narrowly specialized skills for the economy's enterprises; b) One way to reduce costs to government would be to locate practical training entirely in-plant but this is increasingly difficult; c) EU8 employers' traditional expectations of a fully-subsidized VE system delivering ready-to-work, specifically-skilled recruits are unreasonable; d) Traditional VE was the traditional answer to the question "What to do with those who have performed less well in basic education?" but this answer no longer convinces; and e) Parents and students are showing an increasing preference for general education (GE) over VE. Each of these propositions was discussed in this report not with a view to prescribing a detailed "one-size-fits-all" strategy for all the EU8 countries, but rather to deriving some principles that continued reform of VE could take into account, to the benefit of fiscal efficiency.